Correlation Between North Huajin and Lotus Health
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By analyzing existing cross correlation between North Huajin Chemical and Lotus Health Group, you can compare the effects of market volatilities on North Huajin and Lotus Health 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 North Huajin with a short position of Lotus Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Huajin and Lotus Health.
Diversification Opportunities for North Huajin and Lotus Health
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between North and Lotus is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding North Huajin Chemical and Lotus Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Health Group and North Huajin 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 North Huajin Chemical are associated (or correlated) with Lotus Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Health Group has no effect on the direction of North Huajin i.e., North Huajin and Lotus Health go up and down completely randomly.
Pair Corralation between North Huajin and Lotus Health
Assuming the 90 days trading horizon North Huajin Chemical is expected to under-perform the Lotus Health. But the stock apears to be less risky and, when comparing its historical volatility, North Huajin Chemical is 1.24 times less risky than Lotus Health. The stock trades about -0.01 of its potential returns per unit of risk. The Lotus Health Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 276.00 in Lotus Health Group on September 11, 2024 and sell it today you would earn a total of 292.00 from holding Lotus Health Group or generate 105.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
North Huajin Chemical vs. Lotus Health Group
Performance |
Timeline |
North Huajin Chemical |
Lotus Health Group |
North Huajin and Lotus Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with North Huajin and Lotus Health
The main advantage of trading using opposite North Huajin and Lotus Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Huajin position performs unexpectedly, Lotus Health 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 Lotus Health will offset losses from the drop in Lotus Health's long position.North Huajin vs. Zijin Mining Group | North Huajin vs. Wanhua Chemical Group | North Huajin vs. Baoshan Iron Steel | North Huajin vs. Shandong Gold Mining |
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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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