Correlation Between Sinosteel Luonai and Hubei Xingfa
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By analyzing existing cross correlation between Sinosteel Luonai Materials and Hubei Xingfa Chemicals, you can compare the effects of market volatilities on Sinosteel Luonai and Hubei Xingfa 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 Sinosteel Luonai with a short position of Hubei Xingfa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinosteel Luonai and Hubei Xingfa.
Diversification Opportunities for Sinosteel Luonai and Hubei Xingfa
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sinosteel and Hubei is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Sinosteel Luonai Materials and Hubei Xingfa Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Xingfa Chemicals and Sinosteel Luonai 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 Sinosteel Luonai Materials are associated (or correlated) with Hubei Xingfa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Xingfa Chemicals has no effect on the direction of Sinosteel Luonai i.e., Sinosteel Luonai and Hubei Xingfa go up and down completely randomly.
Pair Corralation between Sinosteel Luonai and Hubei Xingfa
Assuming the 90 days trading horizon Sinosteel Luonai Materials is expected to under-perform the Hubei Xingfa. In addition to that, Sinosteel Luonai is 1.06 times more volatile than Hubei Xingfa Chemicals. It trades about -0.02 of its total potential returns per unit of risk. Hubei Xingfa Chemicals is currently generating about -0.01 per unit of volatility. If you would invest 2,917 in Hubei Xingfa Chemicals on September 13, 2024 and sell it today you would lose (609.00) from holding Hubei Xingfa Chemicals or give up 20.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinosteel Luonai Materials vs. Hubei Xingfa Chemicals
Performance |
| Timeline |
| Sinosteel Luonai Mat |
| Hubei Xingfa Chemicals |
Sinosteel Luonai and Hubei Xingfa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinosteel Luonai and Hubei Xingfa
The main advantage of trading using opposite Sinosteel Luonai and Hubei Xingfa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinosteel Luonai position performs unexpectedly, Hubei Xingfa 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 Hubei Xingfa will offset losses from the drop in Hubei Xingfa's long position.| Sinosteel Luonai vs. Zijin Mining Group | Sinosteel Luonai vs. Wanhua Chemical Group | Sinosteel Luonai vs. Baoshan Iron Steel | Sinosteel Luonai vs. Shandong Gold Mining |
| Hubei Xingfa vs. Ningbo Tip Rubber | Hubei Xingfa vs. Suzhou Xingye Material | Hubei Xingfa vs. Maccura Biotechnology Co | Hubei Xingfa vs. Sinosteel Luonai Materials |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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