Correlation Between Chahua Modern and Hubeiyichang Transportation
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By analyzing existing cross correlation between Chahua Modern Housewares and Hubeiyichang Transportation Group, you can compare the effects of market volatilities on Chahua Modern and Hubeiyichang Transportation 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 Chahua Modern with a short position of Hubeiyichang Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chahua Modern and Hubeiyichang Transportation.
Diversification Opportunities for Chahua Modern and Hubeiyichang Transportation
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chahua and Hubeiyichang is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Chahua Modern Housewares and Hubeiyichang Transportation Gr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubeiyichang Transportation and Chahua Modern 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 Chahua Modern Housewares are associated (or correlated) with Hubeiyichang Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubeiyichang Transportation has no effect on the direction of Chahua Modern i.e., Chahua Modern and Hubeiyichang Transportation go up and down completely randomly.
Pair Corralation between Chahua Modern and Hubeiyichang Transportation
Assuming the 90 days trading horizon Chahua Modern Housewares is expected to generate 1.95 times more return on investment than Hubeiyichang Transportation. However, Chahua Modern is 1.95 times more volatile than Hubeiyichang Transportation Group. It trades about 0.23 of its potential returns per unit of risk. Hubeiyichang Transportation Group is currently generating about 0.07 per unit of risk. If you would invest 1,375 in Chahua Modern Housewares on September 26, 2024 and sell it today you would earn a total of 991.00 from holding Chahua Modern Housewares or generate 72.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Chahua Modern Housewares vs. Hubeiyichang Transportation Gr
Performance |
Timeline |
Chahua Modern Housewares |
Hubeiyichang Transportation |
Chahua Modern and Hubeiyichang Transportation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chahua Modern and Hubeiyichang Transportation
The main advantage of trading using opposite Chahua Modern and Hubeiyichang Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chahua Modern position performs unexpectedly, Hubeiyichang Transportation 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 Hubeiyichang Transportation will offset losses from the drop in Hubeiyichang Transportation's long position.Chahua Modern vs. China Petroleum Chemical | Chahua Modern vs. PetroChina Co Ltd | Chahua Modern vs. China State Construction | Chahua Modern vs. China Railway Group |
Hubeiyichang Transportation vs. Bank of China | Hubeiyichang Transportation vs. Kweichow Moutai Co | Hubeiyichang Transportation vs. PetroChina Co Ltd | Hubeiyichang Transportation vs. Bank of Communications |
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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