Correlation Between Sichuan Hebang and Gansu Jiu
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By analyzing existing cross correlation between Sichuan Hebang Biotechnology and Gansu Jiu Steel, you can compare the effects of market volatilities on Sichuan Hebang and Gansu Jiu 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 Gansu Jiu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Hebang and Gansu Jiu.
Diversification Opportunities for Sichuan Hebang and Gansu Jiu
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sichuan and Gansu is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Hebang Biotechnology and Gansu Jiu Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gansu Jiu Steel 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 Gansu Jiu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gansu Jiu Steel has no effect on the direction of Sichuan Hebang i.e., Sichuan Hebang and Gansu Jiu go up and down completely randomly.
Pair Corralation between Sichuan Hebang and Gansu Jiu
Assuming the 90 days trading horizon Sichuan Hebang Biotechnology is expected to generate 0.8 times more return on investment than Gansu Jiu. However, Sichuan Hebang Biotechnology is 1.26 times less risky than Gansu Jiu. It trades about -0.34 of its potential returns per unit of risk. Gansu Jiu Steel is currently generating about -0.28 per unit of risk. If you would invest 212.00 in Sichuan Hebang Biotechnology on October 24, 2024 and sell it today you would lose (22.00) from holding Sichuan Hebang Biotechnology or give up 10.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Hebang Biotechnology vs. Gansu Jiu Steel
Performance |
| Timeline |
| Sichuan Hebang Biote |
| Gansu Jiu Steel |
Sichuan Hebang and Gansu Jiu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Hebang and Gansu Jiu
The main advantage of trading using opposite Sichuan Hebang and Gansu Jiu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Hebang position performs unexpectedly, Gansu Jiu 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 Gansu Jiu will offset losses from the drop in Gansu Jiu's long position.| Sichuan Hebang vs. Jiujiang Shanshui Technology | Sichuan Hebang vs. JCHX Mining Management | Sichuan Hebang vs. Huaxia Fund Management | Sichuan Hebang vs. Innovative Medical Management |
| Gansu Jiu vs. Sichuan Hebang Biotechnology | Gansu Jiu vs. Guilin Seamild Foods | Gansu Jiu vs. HaiXin Foods Co | Gansu Jiu vs. Zhongjing Food Co |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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