Correlation Between HUAQIN TECHNOLOGY and Shanghai Rongtai
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By analyzing existing cross correlation between HUAQIN TECHNOLOGY LTD and Shanghai Rongtai Health, you can compare the effects of market volatilities on HUAQIN TECHNOLOGY and Shanghai Rongtai 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 Shanghai Rongtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUAQIN TECHNOLOGY and Shanghai Rongtai.
Diversification Opportunities for HUAQIN TECHNOLOGY and Shanghai Rongtai
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between HUAQIN and Shanghai is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding HUAQIN TECHNOLOGY LTD and Shanghai Rongtai Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Rongtai Health 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 Shanghai Rongtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Rongtai Health has no effect on the direction of HUAQIN TECHNOLOGY i.e., HUAQIN TECHNOLOGY and Shanghai Rongtai go up and down completely randomly.
Pair Corralation between HUAQIN TECHNOLOGY and Shanghai Rongtai
Assuming the 90 days trading horizon HUAQIN TECHNOLOGY LTD is expected to generate 1.81 times more return on investment than Shanghai Rongtai. However, HUAQIN TECHNOLOGY is 1.81 times more volatile than Shanghai Rongtai Health. It trades about 0.09 of its potential returns per unit of risk. Shanghai Rongtai Health is currently generating about -0.07 per unit of risk. If you would invest 7,095 in HUAQIN TECHNOLOGY LTD on November 1, 2024 and sell it today you would earn a total of 356.00 from holding HUAQIN TECHNOLOGY LTD or generate 5.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
HUAQIN TECHNOLOGY LTD vs. Shanghai Rongtai Health
Performance |
Timeline |
HUAQIN TECHNOLOGY LTD |
Shanghai Rongtai Health |
HUAQIN TECHNOLOGY and Shanghai Rongtai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HUAQIN TECHNOLOGY and Shanghai Rongtai
The main advantage of trading using opposite HUAQIN TECHNOLOGY and Shanghai Rongtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUAQIN TECHNOLOGY position performs unexpectedly, Shanghai Rongtai 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 Shanghai Rongtai will offset losses from the drop in Shanghai Rongtai's long position.HUAQIN TECHNOLOGY vs. Caihong Display Devices | ||
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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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