Correlation Between Sichuan Hebang and Zhejiang Qianjiang
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By analyzing existing cross correlation between Sichuan Hebang Biotechnology and Zhejiang Qianjiang Motorcycle, you can compare the effects of market volatilities on Sichuan Hebang and Zhejiang Qianjiang 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 Sichuan Hebang with a short position of Zhejiang Qianjiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Hebang and Zhejiang Qianjiang.
Diversification Opportunities for Sichuan Hebang and Zhejiang Qianjiang
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sichuan and Zhejiang is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Hebang Biotechnology and Zhejiang Qianjiang Motorcycle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Qianjiang and Sichuan Hebang 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 Sichuan Hebang Biotechnology are associated (or correlated) with Zhejiang Qianjiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Qianjiang has no effect on the direction of Sichuan Hebang i.e., Sichuan Hebang and Zhejiang Qianjiang go up and down completely randomly.
Pair Corralation between Sichuan Hebang and Zhejiang Qianjiang
Assuming the 90 days trading horizon Sichuan Hebang Biotechnology is expected to under-perform the Zhejiang Qianjiang. But the stock apears to be less risky and, when comparing its historical volatility, Sichuan Hebang Biotechnology is 1.42 times less risky than Zhejiang Qianjiang. The stock trades about -0.34 of its potential returns per unit of risk. The Zhejiang Qianjiang Motorcycle is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,702 in Zhejiang Qianjiang Motorcycle on October 8, 2024 and sell it today you would earn a total of 96.00 from holding Zhejiang Qianjiang Motorcycle or generate 5.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sichuan Hebang Biotechnology vs. Zhejiang Qianjiang Motorcycle
Performance |
Timeline |
Sichuan Hebang Biote |
Zhejiang Qianjiang |
Sichuan Hebang and Zhejiang Qianjiang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sichuan Hebang and Zhejiang Qianjiang
The main advantage of trading using opposite Sichuan Hebang and Zhejiang Qianjiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Hebang position performs unexpectedly, Zhejiang Qianjiang 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 Zhejiang Qianjiang will offset losses from the drop in Zhejiang Qianjiang's long position.Sichuan Hebang vs. Guocheng Mining Co | Sichuan Hebang vs. Shenyang Huitian Thermal | Sichuan Hebang vs. Ningbo MedicalSystem Biotechnology | Sichuan Hebang vs. Uroica Mining Safety |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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