Correlation Between Hainan Haiqi and Fujian Wanchen
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By analyzing existing cross correlation between Hainan Haiqi Transportation and Fujian Wanchen Biotechnology, you can compare the effects of market volatilities on Hainan Haiqi and Fujian Wanchen 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 Hainan Haiqi with a short position of Fujian Wanchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Haiqi and Fujian Wanchen.
Diversification Opportunities for Hainan Haiqi and Fujian Wanchen
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hainan and Fujian is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Haiqi Transportation and Fujian Wanchen Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Wanchen Biote and Hainan Haiqi 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 Hainan Haiqi Transportation are associated (or correlated) with Fujian Wanchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Wanchen Biote has no effect on the direction of Hainan Haiqi i.e., Hainan Haiqi and Fujian Wanchen go up and down completely randomly.
Pair Corralation between Hainan Haiqi and Fujian Wanchen
Assuming the 90 days trading horizon Hainan Haiqi Transportation is expected to under-perform the Fujian Wanchen. But the stock apears to be less risky and, when comparing its historical volatility, Hainan Haiqi Transportation is 1.31 times less risky than Fujian Wanchen. The stock trades about -0.11 of its potential returns per unit of risk. The Fujian Wanchen Biotechnology is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 6,479 in Fujian Wanchen Biotechnology on October 16, 2024 and sell it today you would earn a total of 1,810 from holding Fujian Wanchen Biotechnology or generate 27.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Haiqi Transportation vs. Fujian Wanchen Biotechnology
Performance |
| Timeline |
| Hainan Haiqi Transpo |
| Fujian Wanchen Biote |
Hainan Haiqi and Fujian Wanchen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Haiqi and Fujian Wanchen
The main advantage of trading using opposite Hainan Haiqi and Fujian Wanchen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Haiqi position performs unexpectedly, Fujian Wanchen 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 Fujian Wanchen will offset losses from the drop in Fujian Wanchen's long position.| Hainan Haiqi vs. Dynagreen Environmental Protection | Hainan Haiqi vs. Shenzhen MYS Environmental | Hainan Haiqi vs. Fangda Special Steel | Hainan Haiqi vs. Orinko Advanced Plastics |
| Fujian Wanchen vs. Fujian Longzhou Transportation | Fujian Wanchen vs. Shanghai Broadband Technology | Fujian Wanchen vs. Eastern Communications Co | Fujian Wanchen vs. Hainan Haiqi Transportation |
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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