Correlation Between Hubei Xingfa and HeBei Jinniu
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By analyzing existing cross correlation between Hubei Xingfa Chemicals and HeBei Jinniu Chemical, you can compare the effects of market volatilities on Hubei Xingfa and HeBei Jinniu 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 HeBei Jinniu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Xingfa and HeBei Jinniu.
Diversification Opportunities for Hubei Xingfa and HeBei Jinniu
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hubei and HeBei is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Xingfa Chemicals and HeBei Jinniu Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HeBei Jinniu Chemical 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 HeBei Jinniu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HeBei Jinniu Chemical has no effect on the direction of Hubei Xingfa i.e., Hubei Xingfa and HeBei Jinniu go up and down completely randomly.
Pair Corralation between Hubei Xingfa and HeBei Jinniu
Assuming the 90 days trading horizon Hubei Xingfa Chemicals is expected to under-perform the HeBei Jinniu. But the stock apears to be less risky and, when comparing its historical volatility, Hubei Xingfa Chemicals is 3.26 times less risky than HeBei Jinniu. The stock trades about -0.25 of its potential returns per unit of risk. The HeBei Jinniu Chemical is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 528.00 in HeBei Jinniu Chemical on October 19, 2024 and sell it today you would earn a total of 38.00 from holding HeBei Jinniu Chemical or generate 7.2% 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. HeBei Jinniu Chemical
Performance |
| Timeline |
| Hubei Xingfa Chemicals |
| HeBei Jinniu Chemical |
Hubei Xingfa and HeBei Jinniu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Xingfa and HeBei Jinniu
The main advantage of trading using opposite Hubei Xingfa and HeBei Jinniu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Xingfa position performs unexpectedly, HeBei Jinniu 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 HeBei Jinniu will offset losses from the drop in HeBei Jinniu's long position.| Hubei Xingfa vs. Luolai Home Textile | Hubei Xingfa vs. Nanjing OLO Home | Hubei Xingfa vs. Anhui Huaren Health | Hubei Xingfa vs. CSSC Offshore Marine |
| HeBei Jinniu vs. China Everbright Bank | HeBei Jinniu vs. Hubei Xingfa Chemicals | HeBei Jinniu vs. Unisplendour Corp | HeBei Jinniu vs. Xiamen Bank Co |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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