Correlation Between Hubei Huaqiang and Western Metal
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By analyzing existing cross correlation between Hubei Huaqiang High Tech and Western Metal Materials, you can compare the effects of market volatilities on Hubei Huaqiang and Western Metal 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 Hubei Huaqiang with a short position of Western Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Huaqiang and Western Metal.
Diversification Opportunities for Hubei Huaqiang and Western Metal
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hubei and Western is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Huaqiang High Tech and Western Metal Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Metal Materials and Hubei Huaqiang 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 Hubei Huaqiang High Tech are associated (or correlated) with Western Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Metal Materials has no effect on the direction of Hubei Huaqiang i.e., Hubei Huaqiang and Western Metal go up and down completely randomly.
Pair Corralation between Hubei Huaqiang and Western Metal
Assuming the 90 days trading horizon Hubei Huaqiang High Tech is expected to under-perform the Western Metal. But the stock apears to be less risky and, when comparing its historical volatility, Hubei Huaqiang High Tech is 1.03 times less risky than Western Metal. The stock trades about 0.0 of its potential returns per unit of risk. The Western Metal Materials is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,456 in Western Metal Materials on September 4, 2024 and sell it today you would earn a total of 162.00 from holding Western Metal Materials or generate 11.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Huaqiang High Tech vs. Western Metal Materials
Performance |
| Timeline |
| Hubei Huaqiang High |
| Western Metal Materials |
Hubei Huaqiang and Western Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Huaqiang and Western Metal
The main advantage of trading using opposite Hubei Huaqiang and Western Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Huaqiang position performs unexpectedly, Western Metal 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 Western Metal will offset losses from the drop in Western Metal's long position.| Hubei Huaqiang vs. BTG Hotels Group | Hubei Huaqiang vs. Xiangtan Electrochemical Scientific | Hubei Huaqiang vs. Jiangsu Jinling Sports | Hubei Huaqiang vs. Harbin Air Conditioning |
| Western Metal vs. Techshine Electronics Co | Western Metal vs. Leaguer Shenzhen MicroElectronics | Western Metal vs. Suzhou Weizhixiang Food | Western Metal vs. Guilin Seamild Foods |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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