Correlation Between Nantong Haixing and Hengerda New
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By analyzing existing cross correlation between Nantong Haixing Electronics and Hengerda New Materials, you can compare the effects of market volatilities on Nantong Haixing and Hengerda New 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 Nantong Haixing with a short position of Hengerda New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nantong Haixing and Hengerda New.
Diversification Opportunities for Nantong Haixing and Hengerda New
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nantong and Hengerda is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Nantong Haixing Electronics and Hengerda New Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengerda New Materials and Nantong Haixing 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 Nantong Haixing Electronics are associated (or correlated) with Hengerda New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengerda New Materials has no effect on the direction of Nantong Haixing i.e., Nantong Haixing and Hengerda New go up and down completely randomly.
Pair Corralation between Nantong Haixing and Hengerda New
Assuming the 90 days trading horizon Nantong Haixing is expected to generate 1.92 times less return on investment than Hengerda New. But when comparing it to its historical volatility, Nantong Haixing Electronics is 1.62 times less risky than Hengerda New. It trades about 0.01 of its potential returns per unit of risk. Hengerda New Materials is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,123 in Hengerda New Materials on September 2, 2024 and sell it today you would lose (294.00) from holding Hengerda New Materials or give up 9.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nantong Haixing Electronics vs. Hengerda New Materials
Performance |
| Timeline |
| Nantong Haixing Elec |
| Hengerda New Materials |
Nantong Haixing and Hengerda New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nantong Haixing and Hengerda New
The main advantage of trading using opposite Nantong Haixing and Hengerda New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nantong Haixing position performs unexpectedly, Hengerda New 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 Hengerda New will offset losses from the drop in Hengerda New's long position.| Nantong Haixing vs. Cultural Investment Holdings | Nantong Haixing vs. Gome Telecom Equipment | Nantong Haixing vs. Bus Online Co | Nantong Haixing vs. Holitech Technology Co |
| Hengerda New vs. China Petroleum Chemical | Hengerda New vs. PetroChina Co Ltd | Hengerda New vs. China State Construction | Hengerda New vs. China Railway Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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