Correlation Between Hunan Mendale and Guangdong Jingyi
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By analyzing existing cross correlation between Hunan Mendale Hometextile and Guangdong Jingyi Metal, you can compare the effects of market volatilities on Hunan Mendale and Guangdong Jingyi 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 Hunan Mendale with a short position of Guangdong Jingyi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Mendale and Guangdong Jingyi.
Diversification Opportunities for Hunan Mendale and Guangdong Jingyi
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hunan and Guangdong is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Mendale Hometextile and Guangdong Jingyi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Jingyi Metal and Hunan Mendale 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 Hunan Mendale Hometextile are associated (or correlated) with Guangdong Jingyi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Jingyi Metal has no effect on the direction of Hunan Mendale i.e., Hunan Mendale and Guangdong Jingyi go up and down completely randomly.
Pair Corralation between Hunan Mendale and Guangdong Jingyi
Assuming the 90 days trading horizon Hunan Mendale Hometextile is expected to generate 1.21 times more return on investment than Guangdong Jingyi. However, Hunan Mendale is 1.21 times more volatile than Guangdong Jingyi Metal. It trades about 0.27 of its potential returns per unit of risk. Guangdong Jingyi Metal is currently generating about 0.28 per unit of risk. If you would invest 194.00 in Hunan Mendale Hometextile on September 12, 2024 and sell it today you would earn a total of 123.00 from holding Hunan Mendale Hometextile or generate 63.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Hunan Mendale Hometextile vs. Guangdong Jingyi Metal
Performance |
Timeline |
Hunan Mendale Hometextile |
Guangdong Jingyi Metal |
Hunan Mendale and Guangdong Jingyi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hunan Mendale and Guangdong Jingyi
The main advantage of trading using opposite Hunan Mendale and Guangdong Jingyi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Mendale position performs unexpectedly, Guangdong Jingyi 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 Guangdong Jingyi will offset losses from the drop in Guangdong Jingyi's long position.Hunan Mendale vs. Lutian Machinery Co | Hunan Mendale vs. PetroChina Co Ltd | Hunan Mendale vs. Bank of China | Hunan Mendale vs. Gansu Jiu Steel |
Guangdong Jingyi vs. Zijin Mining Group | Guangdong Jingyi vs. Wanhua Chemical Group | Guangdong Jingyi vs. Baoshan Iron Steel | Guangdong Jingyi vs. Rongsheng Petrochemical Co |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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