Correlation Between Hefei Metalforming and Epoxy Base
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By analyzing existing cross correlation between Hefei Metalforming Mach and Epoxy Base Electronic, you can compare the effects of market volatilities on Hefei Metalforming and Epoxy Base 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 Epoxy Base. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hefei Metalforming and Epoxy Base.
Diversification Opportunities for Hefei Metalforming and Epoxy Base
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hefei and Epoxy is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hefei Metalforming Mach and Epoxy Base Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epoxy Base Electronic 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 Epoxy Base. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epoxy Base Electronic has no effect on the direction of Hefei Metalforming i.e., Hefei Metalforming and Epoxy Base go up and down completely randomly.
Pair Corralation between Hefei Metalforming and Epoxy Base
Assuming the 90 days trading horizon Hefei Metalforming is expected to generate 1.33 times less return on investment than Epoxy Base. But when comparing it to its historical volatility, Hefei Metalforming Mach is 1.14 times less risky than Epoxy Base. It trades about 0.15 of its potential returns per unit of risk. Epoxy Base Electronic is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 492.00 in Epoxy Base Electronic on November 7, 2024 and sell it today you would earn a total of 48.00 from holding Epoxy Base Electronic or generate 9.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hefei Metalforming Mach vs. Epoxy Base Electronic
Performance |
| Timeline |
| Hefei Metalforming Mach |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Epoxy Base Electronic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hefei Metalforming and Epoxy Base Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hefei Metalforming and Epoxy Base
The main advantage of trading using opposite Hefei Metalforming and Epoxy Base positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hefei Metalforming position performs unexpectedly, Epoxy Base 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 Epoxy Base will offset losses from the drop in Epoxy Base's long position.The idea behind Hefei Metalforming Mach and Epoxy Base Electronic 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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