Correlation Between Hubei Xingfa and Jiangxi Naipu
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By analyzing existing cross correlation between Hubei Xingfa Chemicals and Jiangxi Naipu Mining, you can compare the effects of market volatilities on Hubei Xingfa and Jiangxi Naipu 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 Jiangxi Naipu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Xingfa and Jiangxi Naipu.
Diversification Opportunities for Hubei Xingfa and Jiangxi Naipu
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hubei and Jiangxi is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Xingfa Chemicals and Jiangxi Naipu Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Naipu Mining 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 Jiangxi Naipu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Naipu Mining has no effect on the direction of Hubei Xingfa i.e., Hubei Xingfa and Jiangxi Naipu go up and down completely randomly.
Pair Corralation between Hubei Xingfa and Jiangxi Naipu
Assuming the 90 days trading horizon Hubei Xingfa Chemicals is expected to generate 0.57 times more return on investment than Jiangxi Naipu. However, Hubei Xingfa Chemicals is 1.74 times less risky than Jiangxi Naipu. It trades about -0.28 of its potential returns per unit of risk. Jiangxi Naipu Mining is currently generating about -0.2 per unit of risk. If you would invest 2,258 in Hubei Xingfa Chemicals on October 18, 2024 and sell it today you would lose (145.00) from holding Hubei Xingfa Chemicals or give up 6.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Xingfa Chemicals vs. Jiangxi Naipu Mining
Performance |
| Timeline |
| Hubei Xingfa Chemicals |
| Jiangxi Naipu Mining |
Hubei Xingfa and Jiangxi Naipu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Xingfa and Jiangxi Naipu
The main advantage of trading using opposite Hubei Xingfa and Jiangxi Naipu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Xingfa position performs unexpectedly, Jiangxi Naipu 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 Jiangxi Naipu will offset losses from the drop in Jiangxi Naipu's long position.| Hubei Xingfa vs. Luyin Investment Group | Hubei Xingfa vs. Chengdu Xingrong Investment | Hubei Xingfa vs. Xiandai Investment Co | Hubei Xingfa vs. Fujian Longzhou Transportation |
| Jiangxi Naipu vs. Kontour Medical Technology | Jiangxi Naipu vs. Nuode Investment Co | Jiangxi Naipu vs. Eastroc Beverage Group | Jiangxi Naipu vs. Allgens Medical Technology |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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