Correlation Between Tibet Huayu and North Chemical
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By analyzing existing cross correlation between Tibet Huayu Mining and North Chemical Industries, you can compare the effects of market volatilities on Tibet Huayu and North Chemical 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 Tibet Huayu with a short position of North Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tibet Huayu and North Chemical.
Diversification Opportunities for Tibet Huayu and North Chemical
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tibet and North is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Tibet Huayu Mining and North Chemical Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Chemical Industries and Tibet Huayu 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 Tibet Huayu Mining are associated (or correlated) with North Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Chemical Industries has no effect on the direction of Tibet Huayu i.e., Tibet Huayu and North Chemical go up and down completely randomly.
Pair Corralation between Tibet Huayu and North Chemical
Assuming the 90 days trading horizon Tibet Huayu Mining is expected to generate 1.15 times more return on investment than North Chemical. However, Tibet Huayu is 1.15 times more volatile than North Chemical Industries. It trades about -0.01 of its potential returns per unit of risk. North Chemical Industries is currently generating about -0.08 per unit of risk. If you would invest 1,510 in Tibet Huayu Mining on September 12, 2024 and sell it today you would lose (26.00) from holding Tibet Huayu Mining or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Tibet Huayu Mining vs. North Chemical Industries
Performance |
| Timeline |
| Tibet Huayu Mining |
| North Chemical Industries |
Tibet Huayu and North Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tibet Huayu and North Chemical
The main advantage of trading using opposite Tibet Huayu and North Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tibet Huayu position performs unexpectedly, North Chemical 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 North Chemical will offset losses from the drop in North Chemical's long position.| Tibet Huayu vs. Zijin Mining Group | Tibet Huayu vs. Wanhua Chemical Group | Tibet Huayu vs. Baoshan Iron Steel | Tibet Huayu vs. Rongsheng Petrochemical Co |
| North Chemical vs. Xiamen Goldenhome Co | North Chemical vs. Tongyu Communication | North Chemical vs. Sichuan Jinshi Technology | North Chemical vs. Shanghai Shuixing Home |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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