Correlation Between Hubei Geoway and Caihong Display
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By analyzing existing cross correlation between Hubei Geoway Investment and Caihong Display Devices, you can compare the effects of market volatilities on Hubei Geoway and Caihong Display 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 Caihong Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Geoway and Caihong Display.
Diversification Opportunities for Hubei Geoway and Caihong Display
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hubei and Caihong is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Geoway Investment and Caihong Display Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caihong Display Devices 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 Caihong Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caihong Display Devices has no effect on the direction of Hubei Geoway i.e., Hubei Geoway and Caihong Display go up and down completely randomly.
Pair Corralation between Hubei Geoway and Caihong Display
Assuming the 90 days trading horizon Hubei Geoway Investment is expected to under-perform the Caihong Display. In addition to that, Hubei Geoway is 1.05 times more volatile than Caihong Display Devices. It trades about -0.01 of its total potential returns per unit of risk. Caihong Display Devices is currently generating about 0.05 per unit of volatility. If you would invest 463.00 in Caihong Display Devices on October 12, 2024 and sell it today you would earn a total of 321.00 from holding Caihong Display Devices or generate 69.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Geoway Investment vs. Caihong Display Devices
Performance |
| Timeline |
| Hubei Geoway Investment |
| Caihong Display Devices |
Hubei Geoway and Caihong Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Geoway and Caihong Display
The main advantage of trading using opposite Hubei Geoway and Caihong Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Geoway position performs unexpectedly, Caihong Display 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 Caihong Display will offset losses from the drop in Caihong Display's long position.| Hubei Geoway vs. Jiangsu Broadcasting Cable | Hubei Geoway vs. Chongqing Road Bridge | Hubei Geoway vs. Shandong Polymer Biochemicals | Hubei Geoway vs. Heilongjiang Transport Development |
| Caihong Display vs. Hubei Geoway Investment | Caihong Display vs. Zhongrun Resources Investment | Caihong Display vs. Jiangsu Yueda Investment | Caihong Display vs. Shantui Construction Machinery |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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