Correlation Between Caihong Display and Hangzhou Minsheng
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By analyzing existing cross correlation between Caihong Display Devices and Hangzhou Minsheng Healthcare, you can compare the effects of market volatilities on Caihong Display and Hangzhou Minsheng 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 Caihong Display with a short position of Hangzhou Minsheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Hangzhou Minsheng.
Diversification Opportunities for Caihong Display and Hangzhou Minsheng
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Caihong and Hangzhou is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Hangzhou Minsheng Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Minsheng and Caihong Display 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 Caihong Display Devices are associated (or correlated) with Hangzhou Minsheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Minsheng has no effect on the direction of Caihong Display i.e., Caihong Display and Hangzhou Minsheng go up and down completely randomly.
Pair Corralation between Caihong Display and Hangzhou Minsheng
Assuming the 90 days trading horizon Caihong Display Devices is expected to under-perform the Hangzhou Minsheng. In addition to that, Caihong Display is 1.08 times more volatile than Hangzhou Minsheng Healthcare. It trades about -0.13 of its total potential returns per unit of risk. Hangzhou Minsheng Healthcare is currently generating about -0.07 per unit of volatility. If you would invest 1,422 in Hangzhou Minsheng Healthcare on September 12, 2024 and sell it today you would lose (47.00) from holding Hangzhou Minsheng Healthcare or give up 3.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caihong Display Devices vs. Hangzhou Minsheng Healthcare
Performance |
| Timeline |
| Caihong Display Devices |
| Hangzhou Minsheng |
Caihong Display and Hangzhou Minsheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caihong Display and Hangzhou Minsheng
The main advantage of trading using opposite Caihong Display and Hangzhou Minsheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display position performs unexpectedly, Hangzhou Minsheng 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 Hangzhou Minsheng will offset losses from the drop in Hangzhou Minsheng's long position.| Caihong Display vs. Gansu Jiu Steel | Caihong Display vs. Shandong Mining Machinery | Caihong Display vs. Aba Chemicals Corp | Caihong Display vs. BlueFocus Communication Group |
| Hangzhou Minsheng vs. Liaoning Dingjide Petrochemical | Hangzhou Minsheng vs. Yangmei Chemical Co | Hangzhou Minsheng vs. Caihong Display Devices | Hangzhou Minsheng vs. Ningbo Bohui Chemical |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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