Correlation Between Hainan Haiqi and Liaoning Dingjide
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By analyzing existing cross correlation between Hainan Haiqi Transportation and Liaoning Dingjide Petrochemical, you can compare the effects of market volatilities on Hainan Haiqi and Liaoning Dingjide 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 Liaoning Dingjide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Haiqi and Liaoning Dingjide.
Diversification Opportunities for Hainan Haiqi and Liaoning Dingjide
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hainan and Liaoning is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Haiqi Transportation and Liaoning Dingjide Petrochemica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Dingjide 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 Liaoning Dingjide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Dingjide has no effect on the direction of Hainan Haiqi i.e., Hainan Haiqi and Liaoning Dingjide go up and down completely randomly.
Pair Corralation between Hainan Haiqi and Liaoning Dingjide
Assuming the 90 days trading horizon Hainan Haiqi Transportation is expected to under-perform the Liaoning Dingjide. But the stock apears to be less risky and, when comparing its historical volatility, Hainan Haiqi Transportation is 1.54 times less risky than Liaoning Dingjide. The stock trades about -0.5 of its potential returns per unit of risk. The Liaoning Dingjide Petrochemical is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,298 in Liaoning Dingjide Petrochemical on October 14, 2024 and sell it today you would lose (36.00) from holding Liaoning Dingjide Petrochemical or give up 1.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Haiqi Transportation vs. Liaoning Dingjide Petrochemica
Performance |
| Timeline |
| Hainan Haiqi Transpo |
| Liaoning Dingjide |
Hainan Haiqi and Liaoning Dingjide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Haiqi and Liaoning Dingjide
The main advantage of trading using opposite Hainan Haiqi and Liaoning Dingjide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Haiqi position performs unexpectedly, Liaoning Dingjide 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 Liaoning Dingjide will offset losses from the drop in Liaoning Dingjide's long position.| Hainan Haiqi vs. Rising Nonferrous Metals | Hainan Haiqi vs. Shenzhen Topway Video | Hainan Haiqi vs. Guocheng Mining Co | Hainan Haiqi vs. Pengxin International Mining |
| Liaoning Dingjide vs. Hengkang Medical Group | Liaoning Dingjide vs. Hainan Haiqi Transportation | Liaoning Dingjide vs. CareRay Digital Medical | Liaoning Dingjide vs. Allmed Medical Products |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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