Correlation Between Caihong Display and Hubei Xingfa
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By analyzing existing cross correlation between Caihong Display Devices and Hubei Xingfa Chemicals, you can compare the effects of market volatilities on Caihong Display and Hubei Xingfa 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 Hubei Xingfa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Hubei Xingfa.
Diversification Opportunities for Caihong Display and Hubei Xingfa
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caihong and Hubei is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Hubei Xingfa Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Xingfa Chemicals 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 Hubei Xingfa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Xingfa Chemicals has no effect on the direction of Caihong Display i.e., Caihong Display and Hubei Xingfa go up and down completely randomly.
Pair Corralation between Caihong Display and Hubei Xingfa
Assuming the 90 days trading horizon Caihong Display Devices is expected to generate 1.18 times more return on investment than Hubei Xingfa. However, Caihong Display is 1.18 times more volatile than Hubei Xingfa Chemicals. It trades about 0.02 of its potential returns per unit of risk. Hubei Xingfa Chemicals is currently generating about 0.02 per unit of risk. If you would invest 791.00 in Caihong Display Devices on October 12, 2024 and sell it today you would earn a total of 29.00 from holding Caihong Display Devices or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caihong Display Devices vs. Hubei Xingfa Chemicals
Performance |
| Timeline |
| Caihong Display Devices |
| Hubei Xingfa Chemicals |
Caihong Display and Hubei Xingfa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caihong Display and Hubei Xingfa
The main advantage of trading using opposite Caihong Display and Hubei Xingfa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display position performs unexpectedly, Hubei Xingfa 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 Xingfa will offset losses from the drop in Hubei Xingfa's long position.| Caihong Display vs. XiaMen HongXin Electron tech | Caihong Display vs. Beijing Shunxin Agriculture | Caihong Display vs. Dhc Software Co | Caihong Display vs. Holitech Technology Co |
| Hubei Xingfa vs. Caihong Display Devices | Hubei Xingfa vs. Western Mining Co | Hubei Xingfa vs. Citic Offshore Helicopter | Hubei Xingfa vs. Jiugui Liquor Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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