Correlation Between Hubei Xingfa and Guangdong Wens
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By analyzing existing cross correlation between Hubei Xingfa Chemicals and Guangdong Wens Foodstuff, you can compare the effects of market volatilities on Hubei Xingfa and Guangdong Wens and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hubei Xingfa with a short position of Guangdong Wens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Xingfa and Guangdong Wens.
Diversification Opportunities for Hubei Xingfa and Guangdong Wens
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hubei and Guangdong is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Xingfa Chemicals and Guangdong Wens Foodstuff in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Wens Foodstuff and Hubei Xingfa is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hubei Xingfa Chemicals are associated (or correlated) with Guangdong Wens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Wens Foodstuff has no effect on the direction of Hubei Xingfa i.e., Hubei Xingfa and Guangdong Wens go up and down completely randomly.
Pair Corralation between Hubei Xingfa and Guangdong Wens
Assuming the 90 days trading horizon Hubei Xingfa Chemicals is expected to generate 1.03 times more return on investment than Guangdong Wens. However, Hubei Xingfa is 1.03 times more volatile than Guangdong Wens Foodstuff. It trades about 0.06 of its potential returns per unit of risk. Guangdong Wens Foodstuff is currently generating about -0.03 per unit of risk. If you would invest 1,736 in Hubei Xingfa Chemicals on November 3, 2024 and sell it today you would earn a total of 451.00 from holding Hubei Xingfa Chemicals or generate 25.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Xingfa Chemicals vs. Guangdong Wens Foodstuff
Performance |
| Timeline |
| Hubei Xingfa Chemicals |
| Guangdong Wens Foodstuff |
Hubei Xingfa and Guangdong Wens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Xingfa and Guangdong Wens
The main advantage of trading using opposite Hubei Xingfa and Guangdong Wens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Xingfa position performs unexpectedly, Guangdong Wens can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Guangdong Wens will offset losses from the drop in Guangdong Wens' long position.| Hubei Xingfa vs. Zhangjiagang Freetrade Science | Hubei Xingfa vs. Caihong Display Devices | Hubei Xingfa vs. Shenzhen Noposion Agrochemicals | Hubei Xingfa vs. Ningbo Bohui Chemical |
| Guangdong Wens vs. Ningbo Tip Rubber | Guangdong Wens vs. Shanghai Action Education | Guangdong Wens vs. China Asset Management | Guangdong Wens vs. China Publishing Media |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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