Correlation Between Tibet Huayu and Guizhou Chanhen
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By analyzing existing cross correlation between Tibet Huayu Mining and Guizhou Chanhen Chemical, you can compare the effects of market volatilities on Tibet Huayu and Guizhou Chanhen 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 Guizhou Chanhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tibet Huayu and Guizhou Chanhen.
Diversification Opportunities for Tibet Huayu and Guizhou Chanhen
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tibet and Guizhou is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Tibet Huayu Mining and Guizhou Chanhen Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guizhou Chanhen Chemical 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 Guizhou Chanhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guizhou Chanhen Chemical has no effect on the direction of Tibet Huayu i.e., Tibet Huayu and Guizhou Chanhen go up and down completely randomly.
Pair Corralation between Tibet Huayu and Guizhou Chanhen
Assuming the 90 days trading horizon Tibet Huayu Mining is expected to under-perform the Guizhou Chanhen. But the stock apears to be less risky and, when comparing its historical volatility, Tibet Huayu Mining is 1.26 times less risky than Guizhou Chanhen. The stock trades about -0.54 of its potential returns per unit of risk. The Guizhou Chanhen Chemical is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 2,245 in Guizhou Chanhen Chemical on October 13, 2024 and sell it today you would lose (127.00) from holding Guizhou Chanhen Chemical or give up 5.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tibet Huayu Mining vs. Guizhou Chanhen Chemical
Performance |
| Timeline |
| Tibet Huayu Mining |
| Guizhou Chanhen Chemical |
Tibet Huayu and Guizhou Chanhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tibet Huayu and Guizhou Chanhen
The main advantage of trading using opposite Tibet Huayu and Guizhou Chanhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tibet Huayu position performs unexpectedly, Guizhou Chanhen 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 Guizhou Chanhen will offset losses from the drop in Guizhou Chanhen's long position.| Tibet Huayu vs. Jiajia Food Group | Tibet Huayu vs. Zhongshan Public Utilities | Tibet Huayu vs. Digiwin Software Co | Tibet Huayu vs. Ping An Insurance |
| Guizhou Chanhen vs. Zijin Mining Group | Guizhou Chanhen vs. Wanhua Chemical Group | Guizhou Chanhen vs. Baoshan Iron Steel | Guizhou Chanhen vs. Shandong Gold Mining |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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