Correlation Between Hefei Metalforming and Beken Corp
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By analyzing existing cross correlation between Hefei Metalforming Mach and Beken Corp, you can compare the effects of market volatilities on Hefei Metalforming and Beken Corp 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 Beken Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hefei Metalforming and Beken Corp.
Diversification Opportunities for Hefei Metalforming and Beken Corp
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hefei and Beken is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hefei Metalforming Mach and Beken Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beken Corp 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 Beken Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beken Corp has no effect on the direction of Hefei Metalforming i.e., Hefei Metalforming and Beken Corp go up and down completely randomly.
Pair Corralation between Hefei Metalforming and Beken Corp
Assuming the 90 days trading horizon Hefei Metalforming Mach is expected to under-perform the Beken Corp. But the stock apears to be less risky and, when comparing its historical volatility, Hefei Metalforming Mach is 1.6 times less risky than Beken Corp. The stock trades about -0.2 of its potential returns per unit of risk. The Beken Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,762 in Beken Corp on September 27, 2024 and sell it today you would earn a total of 160.00 from holding Beken Corp or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hefei Metalforming Mach vs. Beken Corp
Performance |
| Timeline |
| Hefei Metalforming Mach |
| Beken Corp |
Hefei Metalforming and Beken Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hefei Metalforming and Beken Corp
The main advantage of trading using opposite Hefei Metalforming and Beken Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hefei Metalforming position performs unexpectedly, Beken Corp 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 Beken Corp will offset losses from the drop in Beken Corp's long position.The idea behind Hefei Metalforming Mach and Beken Corp 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.
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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