Correlation Between Western Superconducting and Hubei Huaqiang
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By analyzing existing cross correlation between Western Superconducting Tech and Hubei Huaqiang High Tech, you can compare the effects of market volatilities on Western Superconducting and Hubei Huaqiang 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 Western Superconducting with a short position of Hubei Huaqiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Superconducting and Hubei Huaqiang.
Diversification Opportunities for Western Superconducting and Hubei Huaqiang
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Hubei is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Western Superconducting Tech and Hubei Huaqiang High Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Huaqiang High and Western Superconducting 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 Western Superconducting Tech are associated (or correlated) with Hubei Huaqiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Huaqiang High has no effect on the direction of Western Superconducting i.e., Western Superconducting and Hubei Huaqiang go up and down completely randomly.
Pair Corralation between Western Superconducting and Hubei Huaqiang
Assuming the 90 days trading horizon Western Superconducting Tech is expected to under-perform the Hubei Huaqiang. In addition to that, Western Superconducting is 1.18 times more volatile than Hubei Huaqiang High Tech. It trades about -0.19 of its total potential returns per unit of risk. Hubei Huaqiang High Tech is currently generating about 0.04 per unit of volatility. If you would invest 1,656 in Hubei Huaqiang High Tech on September 1, 2024 and sell it today you would earn a total of 29.00 from holding Hubei Huaqiang High Tech or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Superconducting Tech vs. Hubei Huaqiang High Tech
Performance |
| Timeline |
| Western Superconducting |
| Hubei Huaqiang High |
Western Superconducting and Hubei Huaqiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Superconducting and Hubei Huaqiang
The main advantage of trading using opposite Western Superconducting and Hubei Huaqiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Superconducting position performs unexpectedly, Hubei Huaqiang 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 Huaqiang will offset losses from the drop in Hubei Huaqiang's long position.| Western Superconducting vs. China Petroleum Chemical | Western Superconducting vs. PetroChina Co Ltd | Western Superconducting vs. China State Construction | Western Superconducting vs. China Railway Group |
| Hubei Huaqiang vs. Nanjing Putian Telecommunications | Hubei Huaqiang vs. Shenzhen Hifuture Electric | Hubei Huaqiang vs. Tianjin Realty Development | Hubei Huaqiang vs. Shenyang Huitian Thermal |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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