Correlation Between Hefei Metalforming and China Citic
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By analyzing existing cross correlation between Hefei Metalforming Mach and China Citic Bank, you can compare the effects of market volatilities on Hefei Metalforming and China Citic 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 Hefei Metalforming with a short position of China Citic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hefei Metalforming and China Citic.
Diversification Opportunities for Hefei Metalforming and China Citic
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hefei and China is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Hefei Metalforming Mach and China Citic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Citic Bank and Hefei Metalforming 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 Hefei Metalforming Mach are associated (or correlated) with China Citic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Citic Bank has no effect on the direction of Hefei Metalforming i.e., Hefei Metalforming and China Citic go up and down completely randomly.
Pair Corralation between Hefei Metalforming and China Citic
Assuming the 90 days trading horizon Hefei Metalforming is expected to generate 49.05 times less return on investment than China Citic. In addition to that, Hefei Metalforming is 1.69 times more volatile than China Citic Bank. It trades about 0.0 of its total potential returns per unit of risk. China Citic Bank is currently generating about 0.05 per unit of volatility. If you would invest 464.00 in China Citic Bank on November 7, 2024 and sell it today you would earn a total of 200.00 from holding China Citic Bank or generate 43.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hefei Metalforming Mach vs. China Citic Bank
Performance |
| Timeline |
| Hefei Metalforming Mach |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| China Citic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hefei Metalforming and China Citic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hefei Metalforming and China Citic
The main advantage of trading using opposite Hefei Metalforming and China Citic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hefei Metalforming position performs unexpectedly, China Citic 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 China Citic will offset losses from the drop in China Citic's long position.The idea behind Hefei Metalforming Mach and China Citic Bank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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