Correlation Between Sichuan Hebang and Hangzhou Gaoxin
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By analyzing existing cross correlation between Sichuan Hebang Biotechnology and Hangzhou Gaoxin Rubber, you can compare the effects of market volatilities on Sichuan Hebang and Hangzhou Gaoxin 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 Sichuan Hebang with a short position of Hangzhou Gaoxin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Hebang and Hangzhou Gaoxin.
Diversification Opportunities for Sichuan Hebang and Hangzhou Gaoxin
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sichuan and Hangzhou is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Hebang Biotechnology and Hangzhou Gaoxin Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Gaoxin Rubber and Sichuan Hebang 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 Sichuan Hebang Biotechnology are associated (or correlated) with Hangzhou Gaoxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Gaoxin Rubber has no effect on the direction of Sichuan Hebang i.e., Sichuan Hebang and Hangzhou Gaoxin go up and down completely randomly.
Pair Corralation between Sichuan Hebang and Hangzhou Gaoxin
Assuming the 90 days trading horizon Sichuan Hebang Biotechnology is expected to generate 0.91 times more return on investment than Hangzhou Gaoxin. However, Sichuan Hebang Biotechnology is 1.1 times less risky than Hangzhou Gaoxin. It trades about 0.1 of its potential returns per unit of risk. Hangzhou Gaoxin Rubber is currently generating about -0.04 per unit of risk. If you would invest 205.00 in Sichuan Hebang Biotechnology on September 5, 2024 and sell it today you would earn a total of 9.00 from holding Sichuan Hebang Biotechnology or generate 4.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Hebang Biotechnology vs. Hangzhou Gaoxin Rubber
Performance |
| Timeline |
| Sichuan Hebang Biote |
| Hangzhou Gaoxin Rubber |
Sichuan Hebang and Hangzhou Gaoxin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Hebang and Hangzhou Gaoxin
The main advantage of trading using opposite Sichuan Hebang and Hangzhou Gaoxin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Hebang position performs unexpectedly, Hangzhou Gaoxin 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 Hangzhou Gaoxin will offset losses from the drop in Hangzhou Gaoxin's long position.| Sichuan Hebang vs. Vanfund Urban Investment | Sichuan Hebang vs. Jointo Energy Investment | Sichuan Hebang vs. Yindu Kitchen Equipment | Sichuan Hebang vs. Tieling Newcity Investment |
| Hangzhou Gaoxin vs. Hubei Xingfa Chemicals | Hangzhou Gaoxin vs. Miracll Chemicals Co | Hangzhou Gaoxin vs. Sichuan Hebang Biotechnology | Hangzhou Gaoxin vs. Guangdong Jinming Machinery |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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