Correlation Between Datang HuaYin and Bengang Steel
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By analyzing existing cross correlation between Datang HuaYin Electric and Bengang Steel Plates, you can compare the effects of market volatilities on Datang HuaYin and Bengang Steel 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 Datang HuaYin with a short position of Bengang Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang HuaYin and Bengang Steel.
Diversification Opportunities for Datang HuaYin and Bengang Steel
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Datang and Bengang is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Datang HuaYin Electric and Bengang Steel Plates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bengang Steel Plates and Datang HuaYin 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 Datang HuaYin Electric are associated (or correlated) with Bengang Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bengang Steel Plates has no effect on the direction of Datang HuaYin i.e., Datang HuaYin and Bengang Steel go up and down completely randomly.
Pair Corralation between Datang HuaYin and Bengang Steel
Assuming the 90 days trading horizon Datang HuaYin Electric is expected to generate 0.87 times more return on investment than Bengang Steel. However, Datang HuaYin Electric is 1.15 times less risky than Bengang Steel. It trades about 0.07 of its potential returns per unit of risk. Bengang Steel Plates is currently generating about -0.02 per unit of risk. If you would invest 343.00 in Datang HuaYin Electric on September 5, 2024 and sell it today you would earn a total of 9.00 from holding Datang HuaYin Electric or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Datang HuaYin Electric vs. Bengang Steel Plates
Performance |
| Timeline |
| Datang HuaYin Electric |
| Bengang Steel Plates |
Datang HuaYin and Bengang Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang HuaYin and Bengang Steel
The main advantage of trading using opposite Datang HuaYin and Bengang Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang HuaYin position performs unexpectedly, Bengang Steel 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 Bengang Steel will offset losses from the drop in Bengang Steel's long position.| Datang HuaYin vs. Industrial and Commercial | Datang HuaYin vs. Agricultural Bank of | Datang HuaYin vs. China Construction Bank | Datang HuaYin vs. Bank of China |
| Bengang Steel vs. Yunnan Jianzhijia Health Chain | Bengang Steel vs. De Rucci Healthy | Bengang Steel vs. Everjoy Health Group | Bengang Steel vs. Datang HuaYin Electric |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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