Correlation Between Hubei Xingfa and Penyao Environmental
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By analyzing existing cross correlation between Hubei Xingfa Chemicals and Penyao Environmental Protection, you can compare the effects of market volatilities on Hubei Xingfa and Penyao Environmental 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 Penyao Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Xingfa and Penyao Environmental.
Diversification Opportunities for Hubei Xingfa and Penyao Environmental
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hubei and Penyao is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Xingfa Chemicals and Penyao Environmental Protectio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penyao Environmental 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 Penyao Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penyao Environmental has no effect on the direction of Hubei Xingfa i.e., Hubei Xingfa and Penyao Environmental go up and down completely randomly.
Pair Corralation between Hubei Xingfa and Penyao Environmental
Assuming the 90 days trading horizon Hubei Xingfa Chemicals is expected to under-perform the Penyao Environmental. But the stock apears to be less risky and, when comparing its historical volatility, Hubei Xingfa Chemicals is 1.03 times less risky than Penyao Environmental. The stock trades about -0.02 of its potential returns per unit of risk. The Penyao Environmental Protection is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 502.00 in Penyao Environmental Protection on October 16, 2024 and sell it today you would earn a total of 2.00 from holding Penyao Environmental Protection or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Xingfa Chemicals vs. Penyao Environmental Protectio
Performance |
| Timeline |
| Hubei Xingfa Chemicals |
| Penyao Environmental |
Hubei Xingfa and Penyao Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Xingfa and Penyao Environmental
The main advantage of trading using opposite Hubei Xingfa and Penyao Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Xingfa position performs unexpectedly, Penyao Environmental 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 Penyao Environmental will offset losses from the drop in Penyao Environmental's long position.| Hubei Xingfa vs. Jinsanjiang Silicon Material | Hubei Xingfa vs. Yunnan Jianzhijia Health Chain | Hubei Xingfa vs. Hengli Petrochemical Co | Hubei Xingfa vs. Gansu Huangtai Wine marketing |
| Penyao Environmental vs. Unisplendour Corp | Penyao Environmental vs. Ningbo Tech Bank Co | Penyao Environmental vs. Ping An Insurance | Penyao Environmental vs. Hubei Xingfa Chemicals |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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