Correlation Between Liuzhou Chemical and Hua Xia
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By analyzing existing cross correlation between Liuzhou Chemical Industry and Hua Xia Bank, you can compare the effects of market volatilities on Liuzhou Chemical and Hua Xia 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 Hua Xia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liuzhou Chemical and Hua Xia.
Diversification Opportunities for Liuzhou Chemical and Hua Xia
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liuzhou and Hua is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Liuzhou Chemical Industry and Hua Xia Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Xia Bank 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 Hua Xia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Xia Bank has no effect on the direction of Liuzhou Chemical i.e., Liuzhou Chemical and Hua Xia go up and down completely randomly.
Pair Corralation between Liuzhou Chemical and Hua Xia
Assuming the 90 days trading horizon Liuzhou Chemical Industry is expected to generate 1.94 times more return on investment than Hua Xia. However, Liuzhou Chemical is 1.94 times more volatile than Hua Xia Bank. It trades about 0.09 of its potential returns per unit of risk. Hua Xia Bank is currently generating about 0.07 per unit of risk. If you would invest 286.00 in Liuzhou Chemical Industry on August 29, 2024 and sell it today you would earn a total of 16.00 from holding Liuzhou Chemical Industry or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liuzhou Chemical Industry vs. Hua Xia Bank
Performance |
| Timeline |
| Liuzhou Chemical Industry |
| Hua Xia Bank |
Liuzhou Chemical and Hua Xia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liuzhou Chemical and Hua Xia
The main advantage of trading using opposite Liuzhou Chemical and Hua Xia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liuzhou Chemical position performs unexpectedly, Hua Xia 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 Hua Xia will offset losses from the drop in Hua Xia'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 |
| Hua Xia vs. Liuzhou Chemical Industry | Hua Xia vs. HeBei Jinniu Chemical | Hua Xia vs. New Hope Dairy | Hua Xia vs. Eastroc Beverage Group |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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