Correlation Between Fujian Boss and Wuhan Hvsen

Can any of the company-specific risk be diversified away by investing in both Fujian Boss and Wuhan Hvsen 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 Fujian Boss and Wuhan Hvsen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fujian Boss Software and Wuhan Hvsen Biotechnology, you can compare the effects of market volatilities on Fujian Boss and Wuhan Hvsen 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 Fujian Boss with a short position of Wuhan Hvsen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Boss and Wuhan Hvsen.

Diversification Opportunities for Fujian Boss and Wuhan Hvsen

0.75

Correlation Coefficient

Fujian Boss  Wuhan Hvsen

Poor diversification

The 3 months correlation between Fujian and Wuhan is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Boss Software and Wuhan Hvsen Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Hvsen Biotechnology and Fujian Boss 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 Fujian Boss Software are associated (or correlated) with Wuhan Hvsen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Hvsen Biotechnology has no effect on the direction of Fujian Boss i.e., Fujian Boss and Wuhan Hvsen go up and down completely randomly.

Pair Corralation between Fujian Boss and Wuhan Hvsen

Assuming the 90 days trading horizon Fujian Boss is expected to generate 1.79 times less return on investment than Wuhan Hvsen. In addition to that, Fujian Boss is 1.56 times more volatile than Wuhan Hvsen Biotechnology. It trades about 0.04 of its total potential returns per unit of risk. Wuhan Hvsen Biotechnology is currently generating about 0.11 per unit of volatility. If you would invest  1,074  in Wuhan Hvsen Biotechnology on December 24, 2024 and sell it today you would earn a total of  175.00  from holding Wuhan Hvsen Biotechnology or generate 16.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Fujian Boss Software  vs.  Wuhan Hvsen Biotechnology

Fujian Boss Software

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fujian Boss Software are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fujian Boss may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Wuhan Hvsen Biotechnology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wuhan Hvsen Biotechnology are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Wuhan Hvsen sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fujian Boss and Wuhan Hvsen

The main advantage of trading using opposite Fujian Boss and Wuhan Hvsen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Boss position performs unexpectedly, Wuhan Hvsen 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 Wuhan Hvsen will offset losses from the drop in Wuhan Hvsen's long position.

The idea behind Fujian Boss Software and Wuhan Hvsen Biotechnology 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 Transaction History module to view history of all your transactions and understand their impact on performance.