Correlation Between Hangzhou Pinming and Shandong Ruifeng
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By analyzing existing cross correlation between Hangzhou Pinming Software and Shandong Ruifeng Chemical, you can compare the effects of market volatilities on Hangzhou Pinming and Shandong Ruifeng 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 Shandong Ruifeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Pinming and Shandong Ruifeng.
Diversification Opportunities for Hangzhou Pinming and Shandong Ruifeng
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hangzhou and Shandong is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Pinming Software and Shandong Ruifeng Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Ruifeng Chemical 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 Shandong Ruifeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Ruifeng Chemical has no effect on the direction of Hangzhou Pinming i.e., Hangzhou Pinming and Shandong Ruifeng go up and down completely randomly.
Pair Corralation between Hangzhou Pinming and Shandong Ruifeng
Assuming the 90 days trading horizon Hangzhou Pinming is expected to generate 2.58 times less return on investment than Shandong Ruifeng. But when comparing it to its historical volatility, Hangzhou Pinming Software is 1.25 times less risky than Shandong Ruifeng. It trades about 0.07 of its potential returns per unit of risk. Shandong Ruifeng Chemical is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 790.00 in Shandong Ruifeng Chemical on September 4, 2024 and sell it today you would earn a total of 318.00 from holding Shandong Ruifeng Chemical or generate 40.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hangzhou Pinming Software vs. Shandong Ruifeng Chemical
Performance |
| Timeline |
| Hangzhou Pinming Software |
| Shandong Ruifeng Chemical |
Hangzhou Pinming and Shandong Ruifeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hangzhou Pinming and Shandong Ruifeng
The main advantage of trading using opposite Hangzhou Pinming and Shandong Ruifeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Pinming position performs unexpectedly, Shandong Ruifeng 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 Ruifeng will offset losses from the drop in Shandong Ruifeng's long position.| Hangzhou Pinming vs. Sobute New Materials | Hangzhou Pinming vs. Jiangnan Mould Plastic | Hangzhou Pinming vs. Jinsanjiang Silicon Material | Hangzhou Pinming vs. Sinosteel Luonai Materials |
| Shandong Ruifeng vs. CITIC Metal Co | Shandong Ruifeng vs. Shanghai Yanpu Metal | Shandong Ruifeng vs. Hangzhou Pinming Software | Shandong Ruifeng vs. Inspur Software Co |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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