Correlation Between Hang Xiao and Lingyuan Iron
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By analyzing existing cross correlation between Hang Xiao Steel and Lingyuan Iron Steel, you can compare the effects of market volatilities on Hang Xiao and Lingyuan Iron 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 Hang Xiao with a short position of Lingyuan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hang Xiao and Lingyuan Iron.
Diversification Opportunities for Hang Xiao and Lingyuan Iron
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hang and Lingyuan is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Hang Xiao Steel and Lingyuan Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lingyuan Iron Steel and Hang Xiao 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 Hang Xiao Steel are associated (or correlated) with Lingyuan Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lingyuan Iron Steel has no effect on the direction of Hang Xiao i.e., Hang Xiao and Lingyuan Iron go up and down completely randomly.
Pair Corralation between Hang Xiao and Lingyuan Iron
Assuming the 90 days trading horizon Hang Xiao is expected to generate 65.07 times less return on investment than Lingyuan Iron. But when comparing it to its historical volatility, Hang Xiao Steel is 1.36 times less risky than Lingyuan Iron. It trades about 0.0 of its potential returns per unit of risk. Lingyuan Iron Steel is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 188.00 in Lingyuan Iron Steel on August 30, 2024 and sell it today you would earn a total of 16.00 from holding Lingyuan Iron Steel or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hang Xiao Steel vs. Lingyuan Iron Steel
Performance |
| Timeline |
| Hang Xiao Steel |
| Lingyuan Iron Steel |
Hang Xiao and Lingyuan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hang Xiao and Lingyuan Iron
The main advantage of trading using opposite Hang Xiao and Lingyuan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hang Xiao position performs unexpectedly, Lingyuan Iron 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 Lingyuan Iron will offset losses from the drop in Lingyuan Iron's long position.| Hang Xiao vs. Biwin Storage Technology | Hang Xiao vs. PetroChina Co Ltd | Hang Xiao vs. Industrial and Commercial | Hang Xiao vs. China Construction Bank |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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