Correlation Between United States and Hongli Group
Can any of the company-specific risk be diversified away by investing in both United States and Hongli Group at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining United States and Hongli Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Hongli Group Ordinary, you can compare the effects of market volatilities on United States and Hongli Group 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 United States with a short position of Hongli Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Hongli Group.
Diversification Opportunities for United States and Hongli Group
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Hongli is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Hongli Group Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongli Group Ordinary and United States 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 United States Steel are associated (or correlated) with Hongli Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hongli Group Ordinary has no effect on the direction of United States i.e., United States and Hongli Group go up and down completely randomly.
Pair Corralation between United States and Hongli Group
Taking into account the 90-day investment horizon United States Steel is expected to generate 0.75 times more return on investment than Hongli Group. However, United States Steel is 1.34 times less risky than Hongli Group. It trades about 0.08 of its potential returns per unit of risk. Hongli Group Ordinary is currently generating about -0.13 per unit of risk. If you would invest 3,556 in United States Steel on September 3, 2024 and sell it today you would earn a total of 521.00 from holding United States Steel or generate 14.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. Hongli Group Ordinary
Performance |
| Timeline |
| United States Steel |
| Hongli Group Ordinary |
United States and Hongli Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Hongli Group
The main advantage of trading using opposite United States and Hongli Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, Hongli Group 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 Hongli Group will offset losses from the drop in Hongli Group's long position.| United States vs. Nucor Corp | United States vs. Steel Dynamics | United States vs. ArcelorMittal SA ADR | United States vs. Gerdau SA ADR |
| Hongli Group vs. Proficient Auto Logistics, | Hongli Group vs. Capital Clean Energy | Hongli Group vs. Rackspace Technology | Hongli Group vs. Hafnia Limited |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |