Correlation Between China Everbright and Hunan Mendale
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By analyzing existing cross correlation between China Everbright Bank and Hunan Mendale Hometextile, you can compare the effects of market volatilities on China Everbright and Hunan Mendale 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 China Everbright with a short position of Hunan Mendale. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Everbright and Hunan Mendale.
Diversification Opportunities for China Everbright and Hunan Mendale
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Hunan is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding China Everbright Bank and Hunan Mendale Hometextile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Mendale Hometextile and China Everbright 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 China Everbright Bank are associated (or correlated) with Hunan Mendale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Mendale Hometextile has no effect on the direction of China Everbright i.e., China Everbright and Hunan Mendale go up and down completely randomly.
Pair Corralation between China Everbright and Hunan Mendale
Assuming the 90 days trading horizon China Everbright is expected to generate 1.7 times less return on investment than Hunan Mendale. But when comparing it to its historical volatility, China Everbright Bank is 3.25 times less risky than Hunan Mendale. It trades about 0.12 of its potential returns per unit of risk. Hunan Mendale Hometextile is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 274.00 in Hunan Mendale Hometextile on November 6, 2024 and sell it today you would earn a total of 35.00 from holding Hunan Mendale Hometextile or generate 12.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Everbright Bank vs. Hunan Mendale Hometextile
Performance |
| Timeline |
| China Everbright Bank |
| Hunan Mendale Hometextile |
China Everbright and Hunan Mendale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Everbright and Hunan Mendale
The main advantage of trading using opposite China Everbright and Hunan Mendale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Everbright position performs unexpectedly, Hunan Mendale 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 Hunan Mendale will offset losses from the drop in Hunan Mendale's long position.| China Everbright vs. Eyebright Medical Technology | China Everbright vs. Guizhou Chanhen Chemical | China Everbright vs. Smartgiant Technology Co | China Everbright vs. Soyea Technology Co |
| Hunan Mendale vs. Daoming OpticsChemical Co | Hunan Mendale vs. Liuzhou Chemical Industry | Hunan Mendale vs. Shenzhen Noposion Agrochemicals | Hunan Mendale vs. Hengli Petrochemical 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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