Correlation Between Fangda Special and Hainan Haiqi
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By analyzing existing cross correlation between Fangda Special Steel and Hainan Haiqi Transportation, you can compare the effects of market volatilities on Fangda Special and Hainan Haiqi 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 Fangda Special with a short position of Hainan Haiqi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fangda Special and Hainan Haiqi.
Diversification Opportunities for Fangda Special and Hainan Haiqi
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fangda and Hainan is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Fangda Special Steel and Hainan Haiqi Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Haiqi Transpo and Fangda Special 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 Fangda Special Steel are associated (or correlated) with Hainan Haiqi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Haiqi Transpo has no effect on the direction of Fangda Special i.e., Fangda Special and Hainan Haiqi go up and down completely randomly.
Pair Corralation between Fangda Special and Hainan Haiqi
Assuming the 90 days trading horizon Fangda Special Steel is expected to generate 0.69 times more return on investment than Hainan Haiqi. However, Fangda Special Steel is 1.46 times less risky than Hainan Haiqi. It trades about -0.01 of its potential returns per unit of risk. Hainan Haiqi Transportation is currently generating about -0.09 per unit of risk. If you would invest 423.00 in Fangda Special Steel on October 30, 2024 and sell it today you would lose (9.00) from holding Fangda Special Steel or give up 2.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fangda Special Steel vs. Hainan Haiqi Transportation
Performance |
| Timeline |
| Fangda Special Steel |
| Hainan Haiqi Transpo |
Fangda Special and Hainan Haiqi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fangda Special and Hainan Haiqi
The main advantage of trading using opposite Fangda Special and Hainan Haiqi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fangda Special position performs unexpectedly, Hainan Haiqi 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 Hainan Haiqi will offset losses from the drop in Hainan Haiqi's long position.| Fangda Special vs. Guangdong Wens Foodstuff | Fangda Special vs. Guangdong Liantai Environmental | Fangda Special vs. Anji Foodstuff Co | Fangda Special vs. Muyuan Foodstuff Co |
| Hainan Haiqi vs. Xinjiang Baodi Mining | Hainan Haiqi vs. Ningbo Bohui Chemical | Hainan Haiqi vs. Easyhome New Retail | Hainan Haiqi vs. China World Trade |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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