Correlation Between Hubei Geoway and Shijiazhuang Tonhe
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By analyzing existing cross correlation between Hubei Geoway Investment and Shijiazhuang Tonhe Electronics, you can compare the effects of market volatilities on Hubei Geoway and Shijiazhuang Tonhe 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 Geoway with a short position of Shijiazhuang Tonhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Geoway and Shijiazhuang Tonhe.
Diversification Opportunities for Hubei Geoway and Shijiazhuang Tonhe
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hubei and Shijiazhuang is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Geoway Investment and Shijiazhuang Tonhe Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shijiazhuang Tonhe and Hubei Geoway 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 Geoway Investment are associated (or correlated) with Shijiazhuang Tonhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shijiazhuang Tonhe has no effect on the direction of Hubei Geoway i.e., Hubei Geoway and Shijiazhuang Tonhe go up and down completely randomly.
Pair Corralation between Hubei Geoway and Shijiazhuang Tonhe
Assuming the 90 days trading horizon Hubei Geoway Investment is expected to under-perform the Shijiazhuang Tonhe. But the stock apears to be less risky and, when comparing its historical volatility, Hubei Geoway Investment is 1.45 times less risky than Shijiazhuang Tonhe. The stock trades about -0.01 of its potential returns per unit of risk. The Shijiazhuang Tonhe Electronics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,607 in Shijiazhuang Tonhe Electronics on October 15, 2024 and sell it today you would lose (112.00) from holding Shijiazhuang Tonhe Electronics or give up 6.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Geoway Investment vs. Shijiazhuang Tonhe Electronics
Performance |
| Timeline |
| Hubei Geoway Investment |
| Shijiazhuang Tonhe |
Hubei Geoway and Shijiazhuang Tonhe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Geoway and Shijiazhuang Tonhe
The main advantage of trading using opposite Hubei Geoway and Shijiazhuang Tonhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Geoway position performs unexpectedly, Shijiazhuang Tonhe 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 Shijiazhuang Tonhe will offset losses from the drop in Shijiazhuang Tonhe's long position.| Hubei Geoway vs. Tongxing Environmental Protection | Hubei Geoway vs. Penyao Environmental Protection | Hubei Geoway vs. Shuhua Sports Co | Hubei Geoway vs. Beijing Jiaman Dress |
| Shijiazhuang Tonhe vs. Beijing Jiaman Dress | Shijiazhuang Tonhe vs. Anhui Transport Consulting | Shijiazhuang Tonhe vs. Changjiang Jinggong Steel | Shijiazhuang Tonhe vs. Road Environment 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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