Correlation Between Pengxin International and Hefei Metalforming
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By analyzing existing cross correlation between Pengxin International Mining and Hefei Metalforming Mach, you can compare the effects of market volatilities on Pengxin International and Hefei Metalforming 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 Pengxin International with a short position of Hefei Metalforming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pengxin International and Hefei Metalforming.
Diversification Opportunities for Pengxin International and Hefei Metalforming
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pengxin and Hefei is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Pengxin International Mining and Hefei Metalforming Mach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hefei Metalforming Mach and Pengxin International 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 Pengxin International Mining are associated (or correlated) with Hefei Metalforming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hefei Metalforming Mach has no effect on the direction of Pengxin International i.e., Pengxin International and Hefei Metalforming go up and down completely randomly.
Pair Corralation between Pengxin International and Hefei Metalforming
Assuming the 90 days trading horizon Pengxin International is expected to generate 4.97 times less return on investment than Hefei Metalforming. But when comparing it to its historical volatility, Pengxin International Mining is 1.27 times less risky than Hefei Metalforming. It trades about 0.01 of its potential returns per unit of risk. Hefei Metalforming Mach is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 751.00 in Hefei Metalforming Mach on August 29, 2024 and sell it today you would earn a total of 15.00 from holding Hefei Metalforming Mach or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pengxin International Mining vs. Hefei Metalforming Mach
Performance |
| Timeline |
| Pengxin International |
| Hefei Metalforming Mach |
Pengxin International and Hefei Metalforming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pengxin International and Hefei Metalforming
The main advantage of trading using opposite Pengxin International and Hefei Metalforming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pengxin International position performs unexpectedly, Hefei Metalforming 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 Hefei Metalforming will offset losses from the drop in Hefei Metalforming's long position.| Pengxin International vs. Baoshan Iron Steel | Pengxin International vs. Shandong Gold Mining | Pengxin International vs. Rongsheng Petrochemical Co | Pengxin International vs. Inner Mongolia BaoTou |
| Hefei Metalforming vs. PetroChina Co Ltd | Hefei Metalforming vs. China State Construction | Hefei Metalforming vs. China Mobile Limited | Hefei Metalforming vs. Industrial and Commercial |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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