Correlation Between Hubei Xingfa and Changchun BCHT
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By analyzing existing cross correlation between Hubei Xingfa Chemicals and Changchun BCHT Biotechnology, you can compare the effects of market volatilities on Hubei Xingfa and Changchun BCHT 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 Changchun BCHT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Xingfa and Changchun BCHT.
Diversification Opportunities for Hubei Xingfa and Changchun BCHT
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hubei and Changchun is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Xingfa Chemicals and Changchun BCHT Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun BCHT Biote 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 Changchun BCHT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun BCHT Biote has no effect on the direction of Hubei Xingfa i.e., Hubei Xingfa and Changchun BCHT go up and down completely randomly.
Pair Corralation between Hubei Xingfa and Changchun BCHT
Assuming the 90 days trading horizon Hubei Xingfa Chemicals is expected to generate 0.74 times more return on investment than Changchun BCHT. However, Hubei Xingfa Chemicals is 1.34 times less risky than Changchun BCHT. It trades about 0.06 of its potential returns per unit of risk. Changchun BCHT Biotechnology is currently generating about -0.11 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Xingfa Chemicals vs. Changchun BCHT Biotechnology
Performance |
| Timeline |
| Hubei Xingfa Chemicals |
| Changchun BCHT Biote |
Hubei Xingfa and Changchun BCHT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Xingfa and Changchun BCHT
The main advantage of trading using opposite Hubei Xingfa and Changchun BCHT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Xingfa position performs unexpectedly, Changchun BCHT 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 Changchun BCHT will offset losses from the drop in Changchun BCHT's 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 |
| Changchun BCHT vs. Dhc Software Co | Changchun BCHT vs. Heilongjiang Transport Development | Changchun BCHT vs. Sinofibers Technology Co | Changchun BCHT vs. Hubei Forbon 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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