Correlation Between HOB Biotech and Shanxi Lanhua
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By analyzing existing cross correlation between HOB Biotech Group and Shanxi Lanhua Sci Tech, you can compare the effects of market volatilities on HOB Biotech and Shanxi Lanhua 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 HOB Biotech with a short position of Shanxi Lanhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOB Biotech and Shanxi Lanhua.
Diversification Opportunities for HOB Biotech and Shanxi Lanhua
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between HOB and Shanxi is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding HOB Biotech Group and Shanxi Lanhua Sci Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanxi Lanhua Sci and HOB Biotech 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 HOB Biotech Group are associated (or correlated) with Shanxi Lanhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanxi Lanhua Sci has no effect on the direction of HOB Biotech i.e., HOB Biotech and Shanxi Lanhua go up and down completely randomly.
Pair Corralation between HOB Biotech and Shanxi Lanhua
Assuming the 90 days trading horizon HOB Biotech Group is expected to generate 2.0 times more return on investment than Shanxi Lanhua. However, HOB Biotech is 2.0 times more volatile than Shanxi Lanhua Sci Tech. It trades about 0.07 of its potential returns per unit of risk. Shanxi Lanhua Sci Tech is currently generating about -0.01 per unit of risk. If you would invest 3,652 in HOB Biotech Group on October 22, 2024 and sell it today you would earn a total of 5,531 from holding HOB Biotech Group or generate 151.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HOB Biotech Group vs. Shanxi Lanhua Sci Tech
Performance |
| Timeline |
| HOB Biotech Group |
| Shanxi Lanhua Sci |
HOB Biotech and Shanxi Lanhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HOB Biotech and Shanxi Lanhua
The main advantage of trading using opposite HOB Biotech and Shanxi Lanhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOB Biotech position performs unexpectedly, Shanxi Lanhua 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 Shanxi Lanhua will offset losses from the drop in Shanxi Lanhua's long position.| HOB Biotech vs. New Hope Dairy | HOB Biotech vs. Zhongjing Food Co | HOB Biotech vs. Guangdong Wens Foodstuff | HOB Biotech vs. Shantou Wanshun Package |
| Shanxi Lanhua vs. Zhejiang Kingland Pipeline | Shanxi Lanhua vs. Shenzhen MTC Co | Shanxi Lanhua vs. Ming Yang Smart | Shanxi Lanhua vs. Changzhou Almaden 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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