Correlation Between Guangdong Xiongsu and Hubei Dinglong
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By analyzing existing cross correlation between Guangdong Xiongsu Technology and Hubei Dinglong Chemical, you can compare the effects of market volatilities on Guangdong Xiongsu and Hubei Dinglong 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 Guangdong Xiongsu with a short position of Hubei Dinglong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Xiongsu and Hubei Dinglong.
Diversification Opportunities for Guangdong Xiongsu and Hubei Dinglong
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Hubei is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Xiongsu Technology and Hubei Dinglong Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Dinglong Chemical and Guangdong Xiongsu 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 Guangdong Xiongsu Technology are associated (or correlated) with Hubei Dinglong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Dinglong Chemical has no effect on the direction of Guangdong Xiongsu i.e., Guangdong Xiongsu and Hubei Dinglong go up and down completely randomly.
Pair Corralation between Guangdong Xiongsu and Hubei Dinglong
Assuming the 90 days trading horizon Guangdong Xiongsu Technology is expected to generate 1.27 times more return on investment than Hubei Dinglong. However, Guangdong Xiongsu is 1.27 times more volatile than Hubei Dinglong Chemical. It trades about 0.16 of its potential returns per unit of risk. Hubei Dinglong Chemical is currently generating about 0.17 per unit of risk. If you would invest 502.00 in Guangdong Xiongsu Technology on September 24, 2024 and sell it today you would earn a total of 237.00 from holding Guangdong Xiongsu Technology or generate 47.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Guangdong Xiongsu Technology vs. Hubei Dinglong Chemical
Performance |
Timeline |
Guangdong Xiongsu |
Hubei Dinglong Chemical |
Guangdong Xiongsu and Hubei Dinglong Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangdong Xiongsu and Hubei Dinglong
The main advantage of trading using opposite Guangdong Xiongsu and Hubei Dinglong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Xiongsu position performs unexpectedly, Hubei Dinglong 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 Dinglong will offset losses from the drop in Hubei Dinglong's long position.Guangdong Xiongsu vs. Hubei Dinglong Chemical | Guangdong Xiongsu vs. Yangmei Chemical Co | Guangdong Xiongsu vs. Glodon Software Co | Guangdong Xiongsu vs. Xilong Chemical Co |
Hubei Dinglong vs. Zijin Mining Group | Hubei Dinglong vs. Wanhua Chemical Group | Hubei Dinglong vs. Baoshan Iron Steel | Hubei Dinglong vs. Shandong Gold Mining |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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