Correlation Between Hongli Group and Flexible Solutions
Can any of the company-specific risk be diversified away by investing in both Hongli Group and Flexible Solutions 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 Hongli Group and Flexible Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hongli Group Ordinary and Flexible Solutions International, you can compare the effects of market volatilities on Hongli Group and Flexible Solutions 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 Hongli Group with a short position of Flexible Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hongli Group and Flexible Solutions.
Diversification Opportunities for Hongli Group and Flexible Solutions
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hongli and Flexible is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Hongli Group Ordinary and Flexible Solutions Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexible Solutions and Hongli Group 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 Hongli Group Ordinary are associated (or correlated) with Flexible Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexible Solutions has no effect on the direction of Hongli Group i.e., Hongli Group and Flexible Solutions go up and down completely randomly.
Pair Corralation between Hongli Group and Flexible Solutions
Considering the 90-day investment horizon Hongli Group Ordinary is expected to generate 1.26 times more return on investment than Flexible Solutions. However, Hongli Group is 1.26 times more volatile than Flexible Solutions International. It trades about 0.28 of its potential returns per unit of risk. Flexible Solutions International is currently generating about 0.02 per unit of risk. If you would invest 66.00 in Hongli Group Ordinary on August 19, 2025 and sell it today you would earn a total of 94.00 from holding Hongli Group Ordinary or generate 142.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hongli Group Ordinary vs. Flexible Solutions Internation
Performance |
| Timeline |
| Hongli Group Ordinary |
| Flexible Solutions |
Hongli Group and Flexible Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hongli Group and Flexible Solutions
The main advantage of trading using opposite Hongli Group and Flexible Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hongli Group position performs unexpectedly, Flexible Solutions 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 Flexible Solutions will offset losses from the drop in Flexible Solutions' long position.| Hongli Group vs. Synalloy | Hongli Group vs. Flexible Solutions International | Hongli Group vs. Westwater Resources | Hongli Group vs. Bioceres Crop Solutions |
| Flexible Solutions vs. Hongli Group Ordinary | Flexible Solutions vs. Synalloy | Flexible Solutions vs. Westwater Resources | Flexible Solutions vs. Bioceres Crop Solutions |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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