Correlation Between China Building and Hefei Metalforming
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By analyzing existing cross correlation between China Building Material and Hefei Metalforming Mach, you can compare the effects of market volatilities on China Building and Hefei Metalforming 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 China Building with a short position of Hefei Metalforming. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Building and Hefei Metalforming.
Diversification Opportunities for China Building and Hefei Metalforming
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Hefei is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding China Building Material and Hefei Metalforming Mach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hefei Metalforming Mach and China Building 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 China Building Material are associated (or correlated) with Hefei Metalforming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hefei Metalforming Mach has no effect on the direction of China Building i.e., China Building and Hefei Metalforming go up and down completely randomly.
Pair Corralation between China Building and Hefei Metalforming
Assuming the 90 days trading horizon China Building Material is expected to generate 0.79 times more return on investment than Hefei Metalforming. However, China Building Material is 1.26 times less risky than Hefei Metalforming. It trades about 0.01 of its potential returns per unit of risk. Hefei Metalforming Mach is currently generating about -0.02 per unit of risk. If you would invest 701.00 in China Building Material on October 26, 2024 and sell it today you would lose (2.00) from holding China Building Material or give up 0.29% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
China Building Material vs. Hefei Metalforming Mach
Performance |
Timeline |
China Building Material |
Hefei Metalforming Mach |
China Building and Hefei Metalforming Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Building and Hefei Metalforming
The main advantage of trading using opposite China Building and Hefei Metalforming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Building position performs unexpectedly, Hefei Metalforming 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 Hefei Metalforming will offset losses from the drop in Hefei Metalforming's long position.China Building vs. Agricultural Bank of | China Building vs. Industrial and Commercial | China Building vs. Bank of China | China Building vs. PetroChina Co Ltd |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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