Correlation Between Hengli Industrial and Sichuan Hebang
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By analyzing existing cross correlation between Hengli Industrial Development and Sichuan Hebang Biotechnology, you can compare the effects of market volatilities on Hengli Industrial and Sichuan Hebang 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 Hengli Industrial with a short position of Sichuan Hebang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengli Industrial and Sichuan Hebang.
Diversification Opportunities for Hengli Industrial and Sichuan Hebang
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hengli and Sichuan is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hengli Industrial Development and Sichuan Hebang Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Hebang Biote and Hengli 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 Hengli Industrial Development are associated (or correlated) with Sichuan Hebang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Hebang Biote has no effect on the direction of Hengli Industrial i.e., Hengli Industrial and Sichuan Hebang go up and down completely randomly.
Pair Corralation between Hengli Industrial and Sichuan Hebang
Assuming the 90 days trading horizon Hengli Industrial Development is expected to generate 1.68 times more return on investment than Sichuan Hebang. However, Hengli Industrial is 1.68 times more volatile than Sichuan Hebang Biotechnology. It trades about 0.12 of its potential returns per unit of risk. Sichuan Hebang Biotechnology is currently generating about -0.1 per unit of risk. If you would invest 226.00 in Hengli Industrial Development on December 4, 2024 and sell it today you would earn a total of 47.00 from holding Hengli Industrial Development or generate 20.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hengli Industrial Development vs. Sichuan Hebang Biotechnology
Performance |
Timeline |
Hengli Industrial |
Sichuan Hebang Biote |
Hengli Industrial and Sichuan Hebang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hengli Industrial and Sichuan Hebang
The main advantage of trading using opposite Hengli Industrial and Sichuan Hebang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengli Industrial position performs unexpectedly, Sichuan Hebang 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 Sichuan Hebang will offset losses from the drop in Sichuan Hebang's long position.Hengli Industrial vs. Shandong Sanyuan Biotechnology | Hengli Industrial vs. Kunshan Dongwei Technology | Hengli Industrial vs. Liaoning Chengda Biotechnology | Hengli Industrial vs. INKON Life Technology |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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