Correlation Between Sichuan Hebang and Heilongjiang Transport
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By analyzing existing cross correlation between Sichuan Hebang Biotechnology and Heilongjiang Transport Development, you can compare the effects of market volatilities on Sichuan Hebang and Heilongjiang Transport 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 Heilongjiang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Hebang and Heilongjiang Transport.
Diversification Opportunities for Sichuan Hebang and Heilongjiang Transport
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sichuan and Heilongjiang is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Hebang Biotechnology and Heilongjiang Transport Develop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heilongjiang Transport 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 Heilongjiang Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heilongjiang Transport has no effect on the direction of Sichuan Hebang i.e., Sichuan Hebang and Heilongjiang Transport go up and down completely randomly.
Pair Corralation between Sichuan Hebang and Heilongjiang Transport
Assuming the 90 days trading horizon Sichuan Hebang Biotechnology is expected to under-perform the Heilongjiang Transport. But the stock apears to be less risky and, when comparing its historical volatility, Sichuan Hebang Biotechnology is 1.77 times less risky than Heilongjiang Transport. The stock trades about -0.05 of its potential returns per unit of risk. The Heilongjiang Transport Development is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 306.00 in Heilongjiang Transport Development on October 13, 2024 and sell it today you would earn a total of 22.00 from holding Heilongjiang Transport Development or generate 7.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Hebang Biotechnology vs. Heilongjiang Transport Develop
Performance |
| Timeline |
| Sichuan Hebang Biote |
| Heilongjiang Transport |
Sichuan Hebang and Heilongjiang Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Hebang and Heilongjiang Transport
The main advantage of trading using opposite Sichuan Hebang and Heilongjiang Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Hebang position performs unexpectedly, Heilongjiang Transport 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 Heilongjiang Transport will offset losses from the drop in Heilongjiang Transport's long position.| Sichuan Hebang vs. Namchow Food Group | Sichuan Hebang vs. Fiberhome Telecommunication Technologies | Sichuan Hebang vs. V V Food | Sichuan Hebang vs. Xinjiang Tianrun Dairy |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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