Correlation Between Hsinli Chemical and China Construction
Can any of the company-specific risk be diversified away by investing in both Hsinli Chemical and China Construction 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 Hsinli Chemical and China Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hsinli Chemical Industrial and China Construction Bank, you can compare the effects of market volatilities on Hsinli Chemical and China Construction 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 Hsinli Chemical with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hsinli Chemical and China Construction.
Diversification Opportunities for Hsinli Chemical and China Construction
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hsinli and China is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Hsinli Chemical Industrial and China Construction Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Construction Bank and Hsinli Chemical 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 Hsinli Chemical Industrial are associated (or correlated) with China Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Construction Bank has no effect on the direction of Hsinli Chemical i.e., Hsinli Chemical and China Construction go up and down completely randomly.
Pair Corralation between Hsinli Chemical and China Construction
Assuming the 90 days trading horizon Hsinli Chemical Industrial is expected to generate 3.75 times more return on investment than China Construction. However, Hsinli Chemical is 3.75 times more volatile than China Construction Bank. It trades about 0.09 of its potential returns per unit of risk. China Construction Bank is currently generating about -0.03 per unit of risk. If you would invest 1,525 in Hsinli Chemical Industrial on October 25, 2024 and sell it today you would earn a total of 3,305 from holding Hsinli Chemical Industrial or generate 216.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 44.47% |
Values | Daily Returns |
Hsinli Chemical Industrial vs. China Construction Bank
Performance |
Timeline |
Hsinli Chemical Indu |
China Construction Bank |
Hsinli Chemical and China Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hsinli Chemical and China Construction
The main advantage of trading using opposite Hsinli Chemical and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hsinli Chemical position performs unexpectedly, China Construction 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 China Construction will offset losses from the drop in China Construction's long position.Hsinli Chemical vs. Shinkong Synthetic Fiber | Hsinli Chemical vs. Ocean Plastics Co | Hsinli Chemical vs. DingZing Advanced Materials | Hsinli Chemical vs. Qualipoly Chemical Corp |
China Construction vs. Loop Telecommunication International | China Construction vs. Hunya Foods Co | China Construction vs. WinMate Communication INC | China Construction vs. Tainet Communication System |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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