Correlation Between HeBei Jinniu and Lotus Health
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By analyzing existing cross correlation between HeBei Jinniu Chemical and Lotus Health Group, you can compare the effects of market volatilities on HeBei Jinniu and Lotus Health 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 HeBei Jinniu with a short position of Lotus Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of HeBei Jinniu and Lotus Health.
Diversification Opportunities for HeBei Jinniu and Lotus Health
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HeBei and Lotus is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding HeBei Jinniu Chemical and Lotus Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Health Group and HeBei Jinniu 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 HeBei Jinniu Chemical are associated (or correlated) with Lotus Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Health Group has no effect on the direction of HeBei Jinniu i.e., HeBei Jinniu and Lotus Health go up and down completely randomly.
Pair Corralation between HeBei Jinniu and Lotus Health
Assuming the 90 days trading horizon HeBei Jinniu is expected to generate 3.46 times less return on investment than Lotus Health. But when comparing it to its historical volatility, HeBei Jinniu Chemical is 1.32 times less risky than Lotus Health. It trades about 0.03 of its potential returns per unit of risk. Lotus Health Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 271.00 in Lotus Health Group on September 11, 2024 and sell it today you would earn a total of 297.00 from holding Lotus Health Group or generate 109.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
HeBei Jinniu Chemical vs. Lotus Health Group
Performance |
Timeline |
HeBei Jinniu Chemical |
Lotus Health Group |
HeBei Jinniu and Lotus Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HeBei Jinniu and Lotus Health
The main advantage of trading using opposite HeBei Jinniu and Lotus Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HeBei Jinniu position performs unexpectedly, Lotus Health 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 Lotus Health will offset losses from the drop in Lotus Health's long position.HeBei Jinniu vs. Zijin Mining Group | HeBei Jinniu vs. Wanhua Chemical Group | HeBei Jinniu vs. Baoshan Iron Steel | HeBei Jinniu 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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