Correlation Between Shaanxi Beiyuan and Hubeiyichang Transportation
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By analyzing existing cross correlation between Shaanxi Beiyuan Chemical and Hubeiyichang Transportation Group, you can compare the effects of market volatilities on Shaanxi Beiyuan and Hubeiyichang Transportation 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 Shaanxi Beiyuan with a short position of Hubeiyichang Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Beiyuan and Hubeiyichang Transportation.
Diversification Opportunities for Shaanxi Beiyuan and Hubeiyichang Transportation
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shaanxi and Hubeiyichang is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Beiyuan Chemical and Hubeiyichang Transportation Gr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubeiyichang Transportation and Shaanxi Beiyuan 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 Shaanxi Beiyuan Chemical are associated (or correlated) with Hubeiyichang Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubeiyichang Transportation has no effect on the direction of Shaanxi Beiyuan i.e., Shaanxi Beiyuan and Hubeiyichang Transportation go up and down completely randomly.
Pair Corralation between Shaanxi Beiyuan and Hubeiyichang Transportation
Assuming the 90 days trading horizon Shaanxi Beiyuan Chemical is expected to under-perform the Hubeiyichang Transportation. But the stock apears to be less risky and, when comparing its historical volatility, Shaanxi Beiyuan Chemical is 1.28 times less risky than Hubeiyichang Transportation. The stock trades about -0.03 of its potential returns per unit of risk. The Hubeiyichang Transportation Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 506.00 in Hubeiyichang Transportation Group on October 23, 2024 and sell it today you would lose (6.00) from holding Hubeiyichang Transportation Group or give up 1.19% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.44% |
Values | Daily Returns |
Shaanxi Beiyuan Chemical vs. Hubeiyichang Transportation Gr
Performance |
Timeline |
Shaanxi Beiyuan Chemical |
Hubeiyichang Transportation |
Shaanxi Beiyuan and Hubeiyichang Transportation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shaanxi Beiyuan and Hubeiyichang Transportation
The main advantage of trading using opposite Shaanxi Beiyuan and Hubeiyichang Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Beiyuan position performs unexpectedly, Hubeiyichang Transportation 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 Hubeiyichang Transportation will offset losses from the drop in Hubeiyichang Transportation's long position.Shaanxi Beiyuan vs. Hunan Mendale Hometextile | Shaanxi Beiyuan vs. Easyhome New Retail | Shaanxi Beiyuan vs. Zoy Home Furnishing | Shaanxi Beiyuan vs. Xiamen Goldenhome Co |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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