Correlation Between Liuzhou Chemical and North Huajin
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By analyzing existing cross correlation between Liuzhou Chemical Industry and North Huajin Chemical, you can compare the effects of market volatilities on Liuzhou Chemical and North Huajin 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 Liuzhou Chemical with a short position of North Huajin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liuzhou Chemical and North Huajin.
Diversification Opportunities for Liuzhou Chemical and North Huajin
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liuzhou and North is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Liuzhou Chemical Industry and North Huajin Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Huajin Chemical and Liuzhou Chemical 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 Liuzhou Chemical Industry are associated (or correlated) with North Huajin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Huajin Chemical has no effect on the direction of Liuzhou Chemical i.e., Liuzhou Chemical and North Huajin go up and down completely randomly.
Pair Corralation between Liuzhou Chemical and North Huajin
Assuming the 90 days trading horizon Liuzhou Chemical Industry is expected to generate 1.44 times more return on investment than North Huajin. However, Liuzhou Chemical is 1.44 times more volatile than North Huajin Chemical. It trades about -0.06 of its potential returns per unit of risk. North Huajin Chemical is currently generating about -0.14 per unit of risk. If you would invest 306.00 in Liuzhou Chemical Industry on September 29, 2024 and sell it today you would lose (13.00) from holding Liuzhou Chemical Industry or give up 4.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liuzhou Chemical Industry vs. North Huajin Chemical
Performance |
| Timeline |
| Liuzhou Chemical Industry |
| North Huajin Chemical |
Liuzhou Chemical and North Huajin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liuzhou Chemical and North Huajin
The main advantage of trading using opposite Liuzhou Chemical and North Huajin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liuzhou Chemical position performs unexpectedly, North Huajin 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 North Huajin will offset losses from the drop in North Huajin's long position.| Liuzhou Chemical vs. Zijin Mining Group | Liuzhou Chemical vs. Wanhua Chemical Group | Liuzhou Chemical vs. Baoshan Iron Steel | Liuzhou Chemical vs. Shandong Gold Mining |
| North Huajin vs. Qtone Education Group | North Huajin vs. Zhangjiagang Freetrade Science | North Huajin vs. Beijing Kaiwen Education | North Huajin vs. Gansu Huangtai Wine marketing |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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