Correlation Between Quintain Steel and Hung Chou

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Can any of the company-specific risk be diversified away by investing in both Quintain Steel and Hung Chou 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 Quintain Steel and Hung Chou into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quintain Steel Co and Hung Chou Fiber, you can compare the effects of market volatilities on Quintain Steel and Hung Chou 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 Quintain Steel with a short position of Hung Chou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quintain Steel and Hung Chou.

Diversification Opportunities for Quintain Steel and Hung Chou

QuintainHungDiversified AwayQuintainHungDiversified Away100%
-0.15
  Correlation Coefficient

Good diversification

The 3 months correlation between Quintain and Hung is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Quintain Steel Co and Hung Chou Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hung Chou Fiber and Quintain Steel 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 Quintain Steel Co are associated (or correlated) with Hung Chou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hung Chou Fiber has no effect on the direction of Quintain Steel i.e., Quintain Steel and Hung Chou go up and down completely randomly.

Pair Corralation between Quintain Steel and Hung Chou

Assuming the 90 days trading horizon Quintain Steel Co is expected to under-perform the Hung Chou. In addition to that, Quintain Steel is 1.28 times more volatile than Hung Chou Fiber. It trades about -0.04 of its total potential returns per unit of risk. Hung Chou Fiber is currently generating about 0.03 per unit of volatility. If you would invest  982.00  in Hung Chou Fiber on November 27, 2024 and sell it today you would earn a total of  203.00  from holding Hung Chou Fiber or generate 20.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.79%
ValuesDaily Returns

Quintain Steel Co  vs.  Hung Chou Fiber

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-505101520
JavaScript chart by amCharts 3.21.152017 1413
       Timeline  
Quintain Steel 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Quintain Steel Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Quintain Steel may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1010.51111.51212.5
Hung Chou Fiber 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Hung Chou Fiber are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Hung Chou may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1010.51111.512

Quintain Steel and Hung Chou Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.15-4.61-3.06-1.520.02611.543.114.686.25 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.152017 1413
       Returns  

Pair Trading with Quintain Steel and Hung Chou

The main advantage of trading using opposite Quintain Steel and Hung Chou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quintain Steel position performs unexpectedly, Hung Chou 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 Hung Chou will offset losses from the drop in Hung Chou's long position.
The idea behind Quintain Steel Co and Hung Chou Fiber pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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