Correlation Between Industrial Securities and Henzhen Zhaowei
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By analyzing existing cross correlation between Industrial Securities Co and Henzhen Zhaowei Machinery, you can compare the effects of market volatilities on Industrial Securities and Henzhen Zhaowei 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 Industrial Securities with a short position of Henzhen Zhaowei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Securities and Henzhen Zhaowei.
Diversification Opportunities for Industrial Securities and Henzhen Zhaowei
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Industrial and Henzhen is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Securities Co and Henzhen Zhaowei Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henzhen Zhaowei Machinery and Industrial Securities 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 Industrial Securities Co are associated (or correlated) with Henzhen Zhaowei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henzhen Zhaowei Machinery has no effect on the direction of Industrial Securities i.e., Industrial Securities and Henzhen Zhaowei go up and down completely randomly.
Pair Corralation between Industrial Securities and Henzhen Zhaowei
Assuming the 90 days trading horizon Industrial Securities Co is expected to under-perform the Henzhen Zhaowei. But the stock apears to be less risky and, when comparing its historical volatility, Industrial Securities Co is 2.7 times less risky than Henzhen Zhaowei. The stock trades about -0.02 of its potential returns per unit of risk. The Henzhen Zhaowei Machinery is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 4,634 in Henzhen Zhaowei Machinery on September 1, 2024 and sell it today you would earn a total of 2,776 from holding Henzhen Zhaowei Machinery or generate 59.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Securities Co vs. Henzhen Zhaowei Machinery
Performance |
| Timeline |
| Industrial Securities |
| Henzhen Zhaowei Machinery |
Industrial Securities and Henzhen Zhaowei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Securities and Henzhen Zhaowei
The main advantage of trading using opposite Industrial Securities and Henzhen Zhaowei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Securities position performs unexpectedly, Henzhen Zhaowei 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 Henzhen Zhaowei will offset losses from the drop in Henzhen Zhaowei's long position.| Industrial Securities vs. BeiGene | Industrial Securities vs. Kweichow Moutai Co | Industrial Securities vs. Beijing Roborock Technology | Industrial Securities vs. G bits Network Technology |
| Henzhen Zhaowei vs. Industrial Securities Co | Henzhen Zhaowei vs. Guangdong Jingyi Metal | Henzhen Zhaowei vs. Pengxin International Mining | Henzhen Zhaowei vs. Qinghaihuading Industrial Co |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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