Correlation Between Hannong Chemicals and APS Holdings
Can any of the company-specific risk be diversified away by investing in both Hannong Chemicals and APS Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hannong Chemicals and APS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hannong Chemicals and APS Holdings, you can compare the effects of market volatilities on Hannong Chemicals and APS Holdings 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 Hannong Chemicals with a short position of APS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannong Chemicals and APS Holdings.
Diversification Opportunities for Hannong Chemicals and APS Holdings
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hannong and APS is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hannong Chemicals and APS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APS Holdings and Hannong Chemicals 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 Hannong Chemicals are associated (or correlated) with APS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APS Holdings has no effect on the direction of Hannong Chemicals i.e., Hannong Chemicals and APS Holdings go up and down completely randomly.
Pair Corralation between Hannong Chemicals and APS Holdings
Assuming the 90 days trading horizon Hannong Chemicals is expected to under-perform the APS Holdings. In addition to that, Hannong Chemicals is 1.85 times more volatile than APS Holdings. It trades about -0.1 of its total potential returns per unit of risk. APS Holdings is currently generating about 0.01 per unit of volatility. If you would invest 552,000 in APS Holdings on September 13, 2024 and sell it today you would lose (1,000.00) from holding APS Holdings or give up 0.18% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hannong Chemicals vs. APS Holdings
Performance |
Timeline |
Hannong Chemicals |
APS Holdings |
Hannong Chemicals and APS Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hannong Chemicals and APS Holdings
The main advantage of trading using opposite Hannong Chemicals and APS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannong Chemicals position performs unexpectedly, APS Holdings 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 APS Holdings will offset losses from the drop in APS Holdings' long position.Hannong Chemicals vs. Koryo Credit Information | Hannong Chemicals vs. SS TECH | Hannong Chemicals vs. A Tech Solution Co | Hannong Chemicals vs. Lion Chemtech Co |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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