Correlation Between Henan Lantian and Shenzhen Bingchuan
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By analyzing existing cross correlation between Henan Lantian Gas and Shenzhen Bingchuan Network, you can compare the effects of market volatilities on Henan Lantian and Shenzhen Bingchuan 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 Shenzhen Bingchuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henan Lantian and Shenzhen Bingchuan.
Diversification Opportunities for Henan Lantian and Shenzhen Bingchuan
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Henan and Shenzhen is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Henan Lantian Gas and Shenzhen Bingchuan Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Bingchuan 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 Shenzhen Bingchuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Bingchuan has no effect on the direction of Henan Lantian i.e., Henan Lantian and Shenzhen Bingchuan go up and down completely randomly.
Pair Corralation between Henan Lantian and Shenzhen Bingchuan
Assuming the 90 days trading horizon Henan Lantian Gas is expected to under-perform the Shenzhen Bingchuan. But the stock apears to be less risky and, when comparing its historical volatility, Henan Lantian Gas is 2.77 times less risky than Shenzhen Bingchuan. The stock trades about -0.12 of its potential returns per unit of risk. The Shenzhen Bingchuan Network is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,942 in Shenzhen Bingchuan Network on November 3, 2024 and sell it today you would earn a total of 198.00 from holding Shenzhen Bingchuan Network or generate 10.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Henan Lantian Gas vs. Shenzhen Bingchuan Network
Performance |
| Timeline |
| Henan Lantian Gas |
| Shenzhen Bingchuan |
Henan Lantian and Shenzhen Bingchuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henan Lantian and Shenzhen Bingchuan
The main advantage of trading using opposite Henan Lantian and Shenzhen Bingchuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henan Lantian position performs unexpectedly, Shenzhen Bingchuan 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 Shenzhen Bingchuan will offset losses from the drop in Shenzhen Bingchuan's long position.| Henan Lantian vs. Wintao Communications Co | Henan Lantian vs. Tongyu Communication | Henan Lantian vs. Beijing Bewinner Communications | Henan Lantian vs. Bank of Communications |
| Shenzhen Bingchuan vs. Lier Chemical Co | Shenzhen Bingchuan vs. Lianhe Chemical Technology | Shenzhen Bingchuan vs. Huasi Agricultural Development | Shenzhen Bingchuan vs. Tjk Machinery Tianjin |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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