Correlation Between Hubei Xingfa and Bomin Electronics
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By analyzing existing cross correlation between Hubei Xingfa Chemicals and Bomin Electronics Co, you can compare the effects of market volatilities on Hubei Xingfa and Bomin Electronics 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 Bomin Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Xingfa and Bomin Electronics.
Diversification Opportunities for Hubei Xingfa and Bomin Electronics
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hubei and Bomin is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Xingfa Chemicals and Bomin Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bomin Electronics 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 Bomin Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bomin Electronics has no effect on the direction of Hubei Xingfa i.e., Hubei Xingfa and Bomin Electronics go up and down completely randomly.
Pair Corralation between Hubei Xingfa and Bomin Electronics
Assuming the 90 days trading horizon Hubei Xingfa Chemicals is expected to generate 0.73 times more return on investment than Bomin Electronics. However, Hubei Xingfa Chemicals is 1.36 times less risky than Bomin Electronics. It trades about -0.02 of its potential returns per unit of risk. Bomin Electronics Co is currently generating about -0.02 per unit of risk. If you would invest 3,190 in Hubei Xingfa Chemicals on August 29, 2024 and sell it today you would lose (890.00) from holding Hubei Xingfa Chemicals or give up 27.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Xingfa Chemicals vs. Bomin Electronics Co
Performance |
| Timeline |
| Hubei Xingfa Chemicals |
| Bomin Electronics |
Hubei Xingfa and Bomin Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Xingfa and Bomin Electronics
The main advantage of trading using opposite Hubei Xingfa and Bomin Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Xingfa position performs unexpectedly, Bomin Electronics 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 Bomin Electronics will offset losses from the drop in Bomin Electronics' long position.| Hubei Xingfa vs. Shandong Gold Mining | Hubei Xingfa vs. Rongsheng Petrochemical Co | Hubei Xingfa vs. Inner Mongolia BaoTou | Hubei Xingfa vs. Jiangxi Ganfeng Lithium |
| Bomin Electronics vs. Keli Sensing Technology | Bomin Electronics vs. Ligao Foods CoLtd | Bomin Electronics vs. Kuangda Technology Group | Bomin Electronics vs. Saurer Intelligent 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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