Correlation Between Fujian Oriental and Weihai Honglin
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By analyzing existing cross correlation between Fujian Oriental Silver and Weihai Honglin Electronic, you can compare the effects of market volatilities on Fujian Oriental and Weihai Honglin 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 Fujian Oriental with a short position of Weihai Honglin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Oriental and Weihai Honglin.
Diversification Opportunities for Fujian Oriental and Weihai Honglin
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fujian and Weihai is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Oriental Silver and Weihai Honglin Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weihai Honglin Electronic and Fujian Oriental 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 Fujian Oriental Silver are associated (or correlated) with Weihai Honglin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weihai Honglin Electronic has no effect on the direction of Fujian Oriental i.e., Fujian Oriental and Weihai Honglin go up and down completely randomly.
Pair Corralation between Fujian Oriental and Weihai Honglin
Assuming the 90 days trading horizon Fujian Oriental Silver is expected to under-perform the Weihai Honglin. In addition to that, Fujian Oriental is 1.31 times more volatile than Weihai Honglin Electronic. It trades about -0.03 of its total potential returns per unit of risk. Weihai Honglin Electronic is currently generating about 0.01 per unit of volatility. If you would invest 1,437 in Weihai Honglin Electronic on September 2, 2024 and sell it today you would lose (68.00) from holding Weihai Honglin Electronic or give up 4.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Oriental Silver vs. Weihai Honglin Electronic
Performance |
| Timeline |
| Fujian Oriental Silver |
| Weihai Honglin Electronic |
Fujian Oriental and Weihai Honglin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Oriental and Weihai Honglin
The main advantage of trading using opposite Fujian Oriental and Weihai Honglin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Oriental position performs unexpectedly, Weihai Honglin 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 Weihai Honglin will offset losses from the drop in Weihai Honglin's long position.| Fujian Oriental vs. Weihai Honglin Electronic | Fujian Oriental vs. Hangzhou Prevail Optoelectronic | Fujian Oriental vs. Fuzhou Rockchip Electronics | Fujian Oriental vs. Bomin Electronics Co |
| Weihai Honglin vs. Cultural Investment Holdings | Weihai Honglin vs. Gome Telecom Equipment | Weihai Honglin vs. Bus Online Co | Weihai Honglin vs. Holitech Technology 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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