Correlation Between Tibet Huayu and Suzhou Weizhixiang
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By analyzing existing cross correlation between Tibet Huayu Mining and Suzhou Weizhixiang Food, you can compare the effects of market volatilities on Tibet Huayu and Suzhou Weizhixiang 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 Suzhou Weizhixiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tibet Huayu and Suzhou Weizhixiang.
Diversification Opportunities for Tibet Huayu and Suzhou Weizhixiang
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tibet and Suzhou is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Tibet Huayu Mining and Suzhou Weizhixiang Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou Weizhixiang Food 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 Suzhou Weizhixiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou Weizhixiang Food has no effect on the direction of Tibet Huayu i.e., Tibet Huayu and Suzhou Weizhixiang go up and down completely randomly.
Pair Corralation between Tibet Huayu and Suzhou Weizhixiang
Assuming the 90 days trading horizon Tibet Huayu Mining is expected to generate 1.31 times more return on investment than Suzhou Weizhixiang. However, Tibet Huayu is 1.31 times more volatile than Suzhou Weizhixiang Food. It trades about 0.04 of its potential returns per unit of risk. Suzhou Weizhixiang Food is currently generating about -0.05 per unit of risk. If you would invest 893.00 in Tibet Huayu Mining on August 28, 2024 and sell it today you would earn a total of 457.00 from holding Tibet Huayu Mining or generate 51.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tibet Huayu Mining vs. Suzhou Weizhixiang Food
Performance |
| Timeline |
| Tibet Huayu Mining |
| Suzhou Weizhixiang Food |
Tibet Huayu and Suzhou Weizhixiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tibet Huayu and Suzhou Weizhixiang
The main advantage of trading using opposite Tibet Huayu and Suzhou Weizhixiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tibet Huayu position performs unexpectedly, Suzhou Weizhixiang 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 Suzhou Weizhixiang will offset losses from the drop in Suzhou Weizhixiang'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 |
| Suzhou Weizhixiang vs. China Petroleum Chemical | Suzhou Weizhixiang vs. PetroChina Co Ltd | Suzhou Weizhixiang vs. China State Construction | Suzhou Weizhixiang vs. China Railway 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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