Correlation Between Liuzhou Chemical and Haima Automobile
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By analyzing existing cross correlation between Liuzhou Chemical Industry and Haima Automobile Group, you can compare the effects of market volatilities on Liuzhou Chemical and Haima Automobile 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 Haima Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liuzhou Chemical and Haima Automobile.
Diversification Opportunities for Liuzhou Chemical and Haima Automobile
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liuzhou and Haima is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Liuzhou Chemical Industry and Haima Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haima Automobile 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 Haima Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haima Automobile has no effect on the direction of Liuzhou Chemical i.e., Liuzhou Chemical and Haima Automobile go up and down completely randomly.
Pair Corralation between Liuzhou Chemical and Haima Automobile
Assuming the 90 days trading horizon Liuzhou Chemical Industry is expected to generate 1.02 times more return on investment than Haima Automobile. However, Liuzhou Chemical is 1.02 times more volatile than Haima Automobile Group. It trades about -0.29 of its potential returns per unit of risk. Haima Automobile Group is currently generating about -0.38 per unit of risk. If you would invest 339.00 in Liuzhou Chemical Industry on October 13, 2024 and sell it today you would lose (59.00) from holding Liuzhou Chemical Industry or give up 17.4% 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. Haima Automobile Group
Performance |
| Timeline |
| Liuzhou Chemical Industry |
| Haima Automobile |
Liuzhou Chemical and Haima Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liuzhou Chemical and Haima Automobile
The main advantage of trading using opposite Liuzhou Chemical and Haima Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liuzhou Chemical position performs unexpectedly, Haima Automobile 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 Haima Automobile will offset losses from the drop in Haima Automobile's long position.| Liuzhou Chemical vs. Tianjin Hi Tech Development | Liuzhou Chemical vs. Shanghai Shibei Hi Tech | Liuzhou Chemical vs. China Publishing Media | Liuzhou Chemical vs. Zhejiang JIULI Hi tech |
| Haima Automobile vs. Jilin Chemical Fibre | Haima Automobile vs. Guangzhou Jointas Chemical | Haima Automobile vs. Xinxiang Chemical Fiber | Haima Automobile vs. Liuzhou Chemical Industry |
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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