Correlation Between Hangzhou Pinming and SUNSEA Telecommunicatio
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By analyzing existing cross correlation between Hangzhou Pinming Software and SUNSEA Telecommunications Co, you can compare the effects of market volatilities on Hangzhou Pinming and SUNSEA Telecommunicatio 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 Hangzhou Pinming with a short position of SUNSEA Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Pinming and SUNSEA Telecommunicatio.
Diversification Opportunities for Hangzhou Pinming and SUNSEA Telecommunicatio
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hangzhou and SUNSEA is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Pinming Software and SUNSEA Telecommunications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUNSEA Telecommunicatio and Hangzhou Pinming 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 Hangzhou Pinming Software are associated (or correlated) with SUNSEA Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUNSEA Telecommunicatio has no effect on the direction of Hangzhou Pinming i.e., Hangzhou Pinming and SUNSEA Telecommunicatio go up and down completely randomly.
Pair Corralation between Hangzhou Pinming and SUNSEA Telecommunicatio
Assuming the 90 days trading horizon Hangzhou Pinming is expected to generate 1.42 times less return on investment than SUNSEA Telecommunicatio. But when comparing it to its historical volatility, Hangzhou Pinming Software is 1.16 times less risky than SUNSEA Telecommunicatio. It trades about 0.03 of its potential returns per unit of risk. SUNSEA Telecommunications Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 569.00 in SUNSEA Telecommunications Co on September 26, 2024 and sell it today you would earn a total of 290.00 from holding SUNSEA Telecommunications Co or generate 50.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Hangzhou Pinming Software vs. SUNSEA Telecommunications Co
Performance |
| Timeline |
| Hangzhou Pinming Software |
| SUNSEA Telecommunicatio |
Hangzhou Pinming and SUNSEA Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hangzhou Pinming and SUNSEA Telecommunicatio
The main advantage of trading using opposite Hangzhou Pinming and SUNSEA Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Pinming position performs unexpectedly, SUNSEA Telecommunicatio 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 SUNSEA Telecommunicatio will offset losses from the drop in SUNSEA Telecommunicatio's long position.| Hangzhou Pinming vs. Industrial and Commercial | Hangzhou Pinming vs. Agricultural Bank of | Hangzhou Pinming vs. China Construction Bank | Hangzhou Pinming vs. Bank of China |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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