Correlation Between Tibet Huayu and Chengdu Kanghua
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By analyzing existing cross correlation between Tibet Huayu Mining and Chengdu Kanghua Biological, you can compare the effects of market volatilities on Tibet Huayu and Chengdu Kanghua 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 Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tibet Huayu and Chengdu Kanghua.
Diversification Opportunities for Tibet Huayu and Chengdu Kanghua
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tibet and Chengdu is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Tibet Huayu Mining and Chengdu Kanghua Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Kanghua Biol 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 Chengdu Kanghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Kanghua Biol has no effect on the direction of Tibet Huayu i.e., Tibet Huayu and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between Tibet Huayu and Chengdu Kanghua
Assuming the 90 days trading horizon Tibet Huayu Mining is expected to generate 1.15 times more return on investment than Chengdu Kanghua. However, Tibet Huayu is 1.15 times more volatile than Chengdu Kanghua Biological. It trades about 0.05 of its potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about -0.02 per unit of risk. If you would invest 899.00 in Tibet Huayu Mining on September 2, 2024 and sell it today you would earn a total of 540.00 from holding Tibet Huayu Mining or generate 60.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tibet Huayu Mining vs. Chengdu Kanghua Biological
Performance |
| Timeline |
| Tibet Huayu Mining |
| Chengdu Kanghua Biol |
Tibet Huayu and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tibet Huayu and Chengdu Kanghua
The main advantage of trading using opposite Tibet Huayu and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tibet Huayu position performs unexpectedly, Chengdu Kanghua 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 Chengdu Kanghua will offset losses from the drop in Chengdu Kanghua's long position.| Tibet Huayu vs. Zijin Mining Group | Tibet Huayu vs. Wanhua Chemical Group | Tibet Huayu vs. Baoshan Iron Steel | Tibet Huayu vs. Shandong Gold Mining |
| Chengdu Kanghua vs. CITIC Guoan Information | Chengdu Kanghua vs. Juewei Food Co | Chengdu Kanghua vs. Zhengzhou Qianweiyangchu Food | Chengdu Kanghua vs. Lootom Telcovideo Network |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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