Correlation Between Tibet Huayu and Hangzhou Weiguang
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By analyzing existing cross correlation between Tibet Huayu Mining and Hangzhou Weiguang Electronic, you can compare the effects of market volatilities on Tibet Huayu and Hangzhou Weiguang 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 Hangzhou Weiguang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tibet Huayu and Hangzhou Weiguang.
Diversification Opportunities for Tibet Huayu and Hangzhou Weiguang
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tibet and Hangzhou is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Tibet Huayu Mining and Hangzhou Weiguang Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Weiguang 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 Hangzhou Weiguang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Weiguang has no effect on the direction of Tibet Huayu i.e., Tibet Huayu and Hangzhou Weiguang go up and down completely randomly.
Pair Corralation between Tibet Huayu and Hangzhou Weiguang
Assuming the 90 days trading horizon Tibet Huayu is expected to generate 3.3 times less return on investment than Hangzhou Weiguang. But when comparing it to its historical volatility, Tibet Huayu Mining is 1.8 times less risky than Hangzhou Weiguang. It trades about 0.21 of its potential returns per unit of risk. Hangzhou Weiguang Electronic is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 2,674 in Hangzhou Weiguang Electronic on November 27, 2024 and sell it today you would earn a total of 699.00 from holding Hangzhou Weiguang Electronic or generate 26.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tibet Huayu Mining vs. Hangzhou Weiguang Electronic
Performance |
| Timeline |
| Tibet Huayu Mining |
| Hangzhou Weiguang |
Tibet Huayu and Hangzhou Weiguang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tibet Huayu and Hangzhou Weiguang
The main advantage of trading using opposite Tibet Huayu and Hangzhou Weiguang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tibet Huayu position performs unexpectedly, Hangzhou Weiguang 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 Weiguang will offset losses from the drop in Hangzhou Weiguang's long position.| Tibet Huayu vs. Huawen Media Investment | Tibet Huayu vs. Duzhe Publishing Media | Tibet Huayu vs. Sichuan Newsnet Media | Tibet Huayu vs. Jilin Chemical Fibre |
| Hangzhou Weiguang vs. Jinhui Mining Co | Hangzhou Weiguang vs. Chenzhou Jingui Silver | Hangzhou Weiguang vs. Guangdong Silvere Sci | Hangzhou Weiguang vs. Zijin Mining Group |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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