Correlation Between Xiamen Goldenhome and Wenzhou Hongfeng
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By analyzing existing cross correlation between Xiamen Goldenhome Co and Wenzhou Hongfeng Electrical, you can compare the effects of market volatilities on Xiamen Goldenhome and Wenzhou Hongfeng 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 Xiamen Goldenhome with a short position of Wenzhou Hongfeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Goldenhome and Wenzhou Hongfeng.
Diversification Opportunities for Xiamen Goldenhome and Wenzhou Hongfeng
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xiamen and Wenzhou is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Goldenhome Co and Wenzhou Hongfeng Electrical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wenzhou Hongfeng Ele and Xiamen Goldenhome 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 Xiamen Goldenhome Co are associated (or correlated) with Wenzhou Hongfeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wenzhou Hongfeng Ele has no effect on the direction of Xiamen Goldenhome i.e., Xiamen Goldenhome and Wenzhou Hongfeng go up and down completely randomly.
Pair Corralation between Xiamen Goldenhome and Wenzhou Hongfeng
Assuming the 90 days trading horizon Xiamen Goldenhome Co is expected to under-perform the Wenzhou Hongfeng. But the stock apears to be less risky and, when comparing its historical volatility, Xiamen Goldenhome Co is 1.33 times less risky than Wenzhou Hongfeng. The stock trades about -0.09 of its potential returns per unit of risk. The Wenzhou Hongfeng Electrical is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 542.00 in Wenzhou Hongfeng Electrical on December 3, 2024 and sell it today you would earn a total of 63.00 from holding Wenzhou Hongfeng Electrical or generate 11.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiamen Goldenhome Co vs. Wenzhou Hongfeng Electrical
Performance |
| Timeline |
| Xiamen Goldenhome |
| Wenzhou Hongfeng Ele |
Xiamen Goldenhome and Wenzhou Hongfeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiamen Goldenhome and Wenzhou Hongfeng
The main advantage of trading using opposite Xiamen Goldenhome and Wenzhou Hongfeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen Goldenhome position performs unexpectedly, Wenzhou Hongfeng 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 Wenzhou Hongfeng will offset losses from the drop in Wenzhou Hongfeng's long position.| Xiamen Goldenhome vs. Beijing Balance Medical | Xiamen Goldenhome vs. Cofoe Medical Technology | Xiamen Goldenhome vs. Shandong Polymer Biochemicals | Xiamen Goldenhome vs. Double Medical Technology |
| Wenzhou Hongfeng vs. XiAn Dagang Road | Wenzhou Hongfeng vs. Shanghai Jinfeng Wine | Wenzhou Hongfeng vs. Metro Investment Development | Wenzhou Hongfeng vs. Anshan Senyuan Road |
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 CEOs Directory module to screen CEOs from public companies around the world.
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