Correlation Between Liuzhou Chemical and Hubei Dinglong
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By analyzing existing cross correlation between Liuzhou Chemical Industry and Hubei Dinglong Chemical, you can compare the effects of market volatilities on Liuzhou Chemical and Hubei Dinglong 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 Hubei Dinglong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liuzhou Chemical and Hubei Dinglong.
Diversification Opportunities for Liuzhou Chemical and Hubei Dinglong
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Liuzhou and Hubei is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Liuzhou Chemical Industry and Hubei Dinglong Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Dinglong 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 Hubei Dinglong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Dinglong Chemical has no effect on the direction of Liuzhou Chemical i.e., Liuzhou Chemical and Hubei Dinglong go up and down completely randomly.
Pair Corralation between Liuzhou Chemical and Hubei Dinglong
Assuming the 90 days trading horizon Liuzhou Chemical Industry is expected to generate 1.04 times more return on investment than Hubei Dinglong. However, Liuzhou Chemical is 1.04 times more volatile than Hubei Dinglong Chemical. It trades about 0.12 of its potential returns per unit of risk. Hubei Dinglong Chemical is currently generating about 0.0 per unit of risk. If you would invest 286.00 in Liuzhou Chemical Industry on August 28, 2024 and sell it today you would earn a total of 21.00 from holding Liuzhou Chemical Industry or generate 7.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Liuzhou Chemical Industry vs. Hubei Dinglong Chemical
Performance |
| Timeline |
| Liuzhou Chemical Industry |
| Hubei Dinglong Chemical |
Liuzhou Chemical and Hubei Dinglong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liuzhou Chemical and Hubei Dinglong
The main advantage of trading using opposite Liuzhou Chemical and Hubei Dinglong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liuzhou Chemical position performs unexpectedly, Hubei Dinglong 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 Hubei Dinglong will offset losses from the drop in Hubei Dinglong'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 |
| Hubei Dinglong vs. Zijin Mining Group | Hubei Dinglong vs. Baoshan Iron Steel | Hubei Dinglong vs. Shandong Gold Mining | Hubei Dinglong vs. Rongsheng Petrochemical 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 Stocks Directory module to find actively traded stocks across global markets.
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