Correlation Between Henan Lantian and Penghua Shenzhen
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By analyzing existing cross correlation between Henan Lantian Gas and Penghua Shenzhen Energy, you can compare the effects of market volatilities on Henan Lantian and Penghua Shenzhen 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 Henan Lantian with a short position of Penghua Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henan Lantian and Penghua Shenzhen.
Diversification Opportunities for Henan Lantian and Penghua Shenzhen
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Henan and Penghua is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Henan Lantian Gas and Penghua Shenzhen Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penghua Shenzhen Energy and Henan Lantian 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 Henan Lantian Gas are associated (or correlated) with Penghua Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penghua Shenzhen Energy has no effect on the direction of Henan Lantian i.e., Henan Lantian and Penghua Shenzhen go up and down completely randomly.
Pair Corralation between Henan Lantian and Penghua Shenzhen
Assuming the 90 days trading horizon Henan Lantian Gas is expected to generate 2.25 times more return on investment than Penghua Shenzhen. However, Henan Lantian is 2.25 times more volatile than Penghua Shenzhen Energy. It trades about 0.06 of its potential returns per unit of risk. Penghua Shenzhen Energy is currently generating about 0.08 per unit of risk. If you would invest 906.00 in Henan Lantian Gas on August 25, 2024 and sell it today you would earn a total of 242.00 from holding Henan Lantian Gas or generate 26.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Henan Lantian Gas vs. Penghua Shenzhen Energy
Performance |
| Timeline |
| Henan Lantian Gas |
| Penghua Shenzhen Energy |
Henan Lantian and Penghua Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henan Lantian and Penghua Shenzhen
The main advantage of trading using opposite Henan Lantian and Penghua Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henan Lantian position performs unexpectedly, Penghua Shenzhen 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 Penghua Shenzhen will offset losses from the drop in Penghua Shenzhen's long position.| Henan Lantian vs. Cambricon Technologies Corp | Henan Lantian vs. Loongson Technology Corp | Henan Lantian vs. Chongqing Road Bridge | Henan Lantian vs. Shenzhen Fortune Trend |
| Penghua Shenzhen vs. Industrial and Commercial | Penghua Shenzhen vs. Kweichow Moutai Co | Penghua Shenzhen vs. Agricultural Bank of | Penghua Shenzhen vs. China Mobile Limited |
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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