Correlation Between Industrial and Henan Lantian
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By analyzing existing cross correlation between Industrial and Commercial and Henan Lantian Gas, you can compare the effects of market volatilities on Industrial and Henan Lantian 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 with a short position of Henan Lantian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Henan Lantian.
Diversification Opportunities for Industrial and Henan Lantian
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Industrial and Henan is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and Henan Lantian Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henan Lantian Gas and Industrial 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 and Commercial are associated (or correlated) with Henan Lantian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henan Lantian Gas has no effect on the direction of Industrial i.e., Industrial and Henan Lantian go up and down completely randomly.
Pair Corralation between Industrial and Henan Lantian
Assuming the 90 days trading horizon Industrial and Commercial is expected to generate 0.66 times more return on investment than Henan Lantian. However, Industrial and Commercial is 1.52 times less risky than Henan Lantian. It trades about 0.1 of its potential returns per unit of risk. Henan Lantian Gas is currently generating about 0.05 per unit of risk. If you would invest 456.00 in Industrial and Commercial on September 12, 2024 and sell it today you would earn a total of 186.00 from holding Industrial and Commercial or generate 40.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. Henan Lantian Gas
Performance |
| Timeline |
| Industrial and Commercial |
| Henan Lantian Gas |
Industrial and Henan Lantian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and Henan Lantian
The main advantage of trading using opposite Industrial and Henan Lantian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, Henan Lantian 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 Henan Lantian will offset losses from the drop in Henan Lantian's long position.| Industrial vs. Eastroc Beverage Group | Industrial vs. China Publishing Media | Industrial vs. Inly Media Co | Industrial vs. Beijing Sanyuan Foods |
| Henan Lantian vs. Gansu Jiu Steel | Henan Lantian vs. Shandong Mining Machinery | Henan Lantian vs. Aba Chemicals Corp | Henan Lantian vs. BlueFocus Communication 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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