Correlation Between Hainan Haiqi and Suzhou Novoprotein
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By analyzing existing cross correlation between Hainan Haiqi Transportation and Suzhou Novoprotein Scientific, you can compare the effects of market volatilities on Hainan Haiqi and Suzhou Novoprotein 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 Suzhou Novoprotein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Haiqi and Suzhou Novoprotein.
Diversification Opportunities for Hainan Haiqi and Suzhou Novoprotein
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hainan and Suzhou is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Haiqi Transportation and Suzhou Novoprotein Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou Novoprotein 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 Suzhou Novoprotein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou Novoprotein has no effect on the direction of Hainan Haiqi i.e., Hainan Haiqi and Suzhou Novoprotein go up and down completely randomly.
Pair Corralation between Hainan Haiqi and Suzhou Novoprotein
Assuming the 90 days trading horizon Hainan Haiqi Transportation is expected to generate 1.1 times more return on investment than Suzhou Novoprotein. However, Hainan Haiqi is 1.1 times more volatile than Suzhou Novoprotein Scientific. It trades about -0.02 of its potential returns per unit of risk. Suzhou Novoprotein Scientific is currently generating about -0.06 per unit of risk. If you would invest 2,792 in Hainan Haiqi Transportation on November 9, 2024 and sell it today you would lose (981.00) from holding Hainan Haiqi Transportation or give up 35.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Haiqi Transportation vs. Suzhou Novoprotein Scientific
Performance |
| Timeline |
| Hainan Haiqi Transpo |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Suzhou Novoprotein |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Hainan Haiqi and Suzhou Novoprotein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Haiqi and Suzhou Novoprotein
The main advantage of trading using opposite Hainan Haiqi and Suzhou Novoprotein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Haiqi position performs unexpectedly, Suzhou Novoprotein 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 Suzhou Novoprotein will offset losses from the drop in Suzhou Novoprotein's long position.The idea behind Hainan Haiqi Transportation and Suzhou Novoprotein Scientific 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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