Correlation Between HUAQIN TECHNOLOGY and Shandong Hongchuang
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By analyzing existing cross correlation between HUAQIN TECHNOLOGY LTD and Shandong Hongchuang Aluminum, you can compare the effects of market volatilities on HUAQIN TECHNOLOGY and Shandong Hongchuang 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 HUAQIN TECHNOLOGY with a short position of Shandong Hongchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUAQIN TECHNOLOGY and Shandong Hongchuang.
Diversification Opportunities for HUAQIN TECHNOLOGY and Shandong Hongchuang
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between HUAQIN and Shandong is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding HUAQIN TECHNOLOGY LTD and Shandong Hongchuang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Hongchuang and HUAQIN TECHNOLOGY 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 HUAQIN TECHNOLOGY LTD are associated (or correlated) with Shandong Hongchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Hongchuang has no effect on the direction of HUAQIN TECHNOLOGY i.e., HUAQIN TECHNOLOGY and Shandong Hongchuang go up and down completely randomly.
Pair Corralation between HUAQIN TECHNOLOGY and Shandong Hongchuang
Assuming the 90 days trading horizon HUAQIN TECHNOLOGY is expected to generate 2.26 times less return on investment than Shandong Hongchuang. But when comparing it to its historical volatility, HUAQIN TECHNOLOGY LTD is 1.07 times less risky than Shandong Hongchuang. It trades about 0.04 of its potential returns per unit of risk. Shandong Hongchuang Aluminum is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 575.00 in Shandong Hongchuang Aluminum on September 3, 2024 and sell it today you would earn a total of 157.00 from holding Shandong Hongchuang Aluminum or generate 27.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HUAQIN TECHNOLOGY LTD vs. Shandong Hongchuang Aluminum
Performance |
| Timeline |
| HUAQIN TECHNOLOGY LTD |
| Shandong Hongchuang |
HUAQIN TECHNOLOGY and Shandong Hongchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUAQIN TECHNOLOGY and Shandong Hongchuang
The main advantage of trading using opposite HUAQIN TECHNOLOGY and Shandong Hongchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUAQIN TECHNOLOGY position performs unexpectedly, Shandong Hongchuang 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 Shandong Hongchuang will offset losses from the drop in Shandong Hongchuang's long position.| HUAQIN TECHNOLOGY vs. Industrial and Commercial | HUAQIN TECHNOLOGY vs. Kweichow Moutai Co | HUAQIN TECHNOLOGY vs. Agricultural Bank of | HUAQIN TECHNOLOGY vs. China Mobile Limited |
| Shandong Hongchuang vs. Zijin Mining Group | Shandong Hongchuang vs. Baoshan Iron Steel | Shandong Hongchuang vs. Hoshine Silicon Ind |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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