Correlation Between Rongcheer Industrial and Hengli Industrial
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By analyzing existing cross correlation between Rongcheer Industrial Technology and Hengli Industrial Development, you can compare the effects of market volatilities on Rongcheer Industrial and Hengli Industrial 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 Rongcheer Industrial with a short position of Hengli Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rongcheer Industrial and Hengli Industrial.
Diversification Opportunities for Rongcheer Industrial and Hengli Industrial
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Rongcheer and Hengli is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Rongcheer Industrial Technolog and Hengli Industrial Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Industrial and Rongcheer Industrial 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 Rongcheer Industrial Technology are associated (or correlated) with Hengli Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengli Industrial has no effect on the direction of Rongcheer Industrial i.e., Rongcheer Industrial and Hengli Industrial go up and down completely randomly.
Pair Corralation between Rongcheer Industrial and Hengli Industrial
Assuming the 90 days trading horizon Rongcheer Industrial Technology is expected to generate 1.4 times more return on investment than Hengli Industrial. However, Rongcheer Industrial is 1.4 times more volatile than Hengli Industrial Development. It trades about 0.02 of its potential returns per unit of risk. Hengli Industrial Development is currently generating about -0.03 per unit of risk. If you would invest 6,487 in Rongcheer Industrial Technology on September 23, 2024 and sell it today you would lose (735.00) from holding Rongcheer Industrial Technology or give up 11.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 84.52% |
Values | Daily Returns |
Rongcheer Industrial Technolog vs. Hengli Industrial Development
Performance |
Timeline |
Rongcheer Industrial |
Hengli Industrial |
Rongcheer Industrial and Hengli Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rongcheer Industrial and Hengli Industrial
The main advantage of trading using opposite Rongcheer Industrial and Hengli Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rongcheer Industrial position performs unexpectedly, Hengli Industrial 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 Hengli Industrial will offset losses from the drop in Hengli Industrial's long position.Rongcheer Industrial vs. Bank of China | Rongcheer Industrial vs. Kweichow Moutai Co | Rongcheer Industrial vs. PetroChina Co Ltd | Rongcheer Industrial vs. Bank of Communications |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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