Correlation Between Goodwill E and Shandong Hongchuang
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By analyzing existing cross correlation between Goodwill E Health and Shandong Hongchuang Aluminum, you can compare the effects of market volatilities on Goodwill E and Shandong Hongchuang 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 Goodwill E with a short position of Shandong Hongchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodwill E and Shandong Hongchuang.
Diversification Opportunities for Goodwill E and Shandong Hongchuang
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Goodwill and Shandong is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Goodwill E Health and Shandong Hongchuang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Hongchuang and Goodwill E 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 Goodwill E Health are associated (or correlated) with Shandong Hongchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Hongchuang has no effect on the direction of Goodwill E i.e., Goodwill E and Shandong Hongchuang go up and down completely randomly.
Pair Corralation between Goodwill E and Shandong Hongchuang
Assuming the 90 days trading horizon Goodwill E Health is expected to generate 1.13 times more return on investment than Shandong Hongchuang. However, Goodwill E is 1.13 times more volatile than Shandong Hongchuang Aluminum. It trades about 0.25 of its potential returns per unit of risk. Shandong Hongchuang Aluminum is currently generating about 0.09 per unit of risk. If you would invest 2,243 in Goodwill E Health on November 8, 2024 and sell it today you would earn a total of 406.00 from holding Goodwill E Health or generate 18.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goodwill E Health vs. Shandong Hongchuang Aluminum
Performance |
| Timeline |
| Goodwill E Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shandong Hongchuang |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Goodwill E and Shandong Hongchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodwill E and Shandong Hongchuang
The main advantage of trading using opposite Goodwill E and Shandong Hongchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodwill E position performs unexpectedly, Shandong Hongchuang 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 Hongchuang will offset losses from the drop in Shandong Hongchuang's long position.The idea behind Goodwill E Health and Shandong Hongchuang Aluminum pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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