Correlation Between Yangmei Chemical and Hubei Geoway
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By analyzing existing cross correlation between Yangmei Chemical Co and Hubei Geoway Investment, you can compare the effects of market volatilities on Yangmei Chemical and Hubei Geoway 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 Yangmei Chemical with a short position of Hubei Geoway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yangmei Chemical and Hubei Geoway.
Diversification Opportunities for Yangmei Chemical and Hubei Geoway
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Yangmei and Hubei is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Yangmei Chemical Co and Hubei Geoway Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Geoway Investment and Yangmei Chemical 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 Yangmei Chemical Co are associated (or correlated) with Hubei Geoway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Geoway Investment has no effect on the direction of Yangmei Chemical i.e., Yangmei Chemical and Hubei Geoway go up and down completely randomly.
Pair Corralation between Yangmei Chemical and Hubei Geoway
Assuming the 90 days trading horizon Yangmei Chemical is expected to generate 24.75 times less return on investment than Hubei Geoway. But when comparing it to its historical volatility, Yangmei Chemical Co is 1.22 times less risky than Hubei Geoway. It trades about 0.01 of its potential returns per unit of risk. Hubei Geoway Investment is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 139.00 in Hubei Geoway Investment on September 1, 2024 and sell it today you would earn a total of 9.00 from holding Hubei Geoway Investment or generate 6.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yangmei Chemical Co vs. Hubei Geoway Investment
Performance |
| Timeline |
| Yangmei Chemical |
| Hubei Geoway Investment |
Yangmei Chemical and Hubei Geoway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yangmei Chemical and Hubei Geoway
The main advantage of trading using opposite Yangmei Chemical and Hubei Geoway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yangmei Chemical position performs unexpectedly, Hubei Geoway 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 Hubei Geoway will offset losses from the drop in Hubei Geoway's long position.| Yangmei Chemical vs. Zijin Mining Group | Yangmei Chemical vs. Wanhua Chemical Group | Yangmei Chemical vs. Baoshan Iron Steel | Yangmei Chemical vs. Shandong Gold Mining |
| Hubei Geoway vs. Qingdao Choho Industrial | Hubei Geoway vs. Jiangsu Jinling Sports | Hubei Geoway vs. Western Metal Materials | Hubei Geoway vs. China Sports Industry |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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