Correlation Between Hubei Forbon and Tianshui Huatian
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By analyzing existing cross correlation between Hubei Forbon Technology and Tianshui Huatian Technology, you can compare the effects of market volatilities on Hubei Forbon and Tianshui Huatian 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 Hubei Forbon with a short position of Tianshui Huatian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Forbon and Tianshui Huatian.
Diversification Opportunities for Hubei Forbon and Tianshui Huatian
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hubei and Tianshui is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Forbon Technology and Tianshui Huatian Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianshui Huatian Tec and Hubei Forbon 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 Hubei Forbon Technology are associated (or correlated) with Tianshui Huatian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianshui Huatian Tec has no effect on the direction of Hubei Forbon i.e., Hubei Forbon and Tianshui Huatian go up and down completely randomly.
Pair Corralation between Hubei Forbon and Tianshui Huatian
Assuming the 90 days trading horizon Hubei Forbon is expected to generate 1.8 times less return on investment than Tianshui Huatian. In addition to that, Hubei Forbon is 1.08 times more volatile than Tianshui Huatian Technology. It trades about 0.1 of its total potential returns per unit of risk. Tianshui Huatian Technology is currently generating about 0.2 per unit of volatility. If you would invest 799.00 in Tianshui Huatian Technology on September 26, 2024 and sell it today you would earn a total of 410.00 from holding Tianshui Huatian Technology or generate 51.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Hubei Forbon Technology vs. Tianshui Huatian Technology
Performance |
Timeline |
Hubei Forbon Technology |
Tianshui Huatian Tec |
Hubei Forbon and Tianshui Huatian Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hubei Forbon and Tianshui Huatian
The main advantage of trading using opposite Hubei Forbon and Tianshui Huatian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Forbon position performs unexpectedly, Tianshui Huatian 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 Tianshui Huatian will offset losses from the drop in Tianshui Huatian's long position.Hubei Forbon vs. Zijin Mining Group | Hubei Forbon vs. Wanhua Chemical Group | Hubei Forbon vs. Baoshan Iron Steel | Hubei Forbon 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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