Correlation Between China Reform and Haima Automobile
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By analyzing existing cross correlation between China Reform Health and Haima Automobile Group, you can compare the effects of market volatilities on China Reform and Haima Automobile 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 Reform with a short position of Haima Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Reform and Haima Automobile.
Diversification Opportunities for China Reform and Haima Automobile
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Haima is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding China Reform Health and Haima Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haima Automobile and China Reform 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 Reform Health are associated (or correlated) with Haima Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haima Automobile has no effect on the direction of China Reform i.e., China Reform and Haima Automobile go up and down completely randomly.
Pair Corralation between China Reform and Haima Automobile
Assuming the 90 days trading horizon China Reform Health is expected to generate 0.78 times more return on investment than Haima Automobile. However, China Reform Health is 1.28 times less risky than Haima Automobile. It trades about -0.02 of its potential returns per unit of risk. Haima Automobile Group is currently generating about -0.08 per unit of risk. If you would invest 1,069 in China Reform Health on January 24, 2025 and sell it today you would lose (21.00) from holding China Reform Health or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Reform Health vs. Haima Automobile Group
Performance |
| Timeline |
| China Reform Health |
| Haima Automobile |
China Reform and Haima Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Reform and Haima Automobile
The main advantage of trading using opposite China Reform and Haima Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Reform position performs unexpectedly, Haima Automobile 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 Haima Automobile will offset losses from the drop in Haima Automobile's long position.| China Reform vs. Qtone Education Group | China Reform vs. Shanghai Action Education | China Reform vs. Heilongjiang Publishing Media | China Reform vs. Beijing Kaiwen Education |
| Haima Automobile vs. Zhejiang Construction Investment | Haima Automobile vs. Shaanxi Energy Investment | Haima Automobile vs. Huawen Media Investment | Haima Automobile vs. Shenzhen Centralcon Investment |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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