Correlation Between Hunan Investment and Kuangda Technology
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By analyzing existing cross correlation between Hunan Investment Group and Kuangda Technology Group, you can compare the effects of market volatilities on Hunan Investment and Kuangda Technology 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 Hunan Investment with a short position of Kuangda Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Investment and Kuangda Technology.
Diversification Opportunities for Hunan Investment and Kuangda Technology
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hunan and Kuangda is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Investment Group and Kuangda Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuangda Technology and Hunan Investment 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 Hunan Investment Group are associated (or correlated) with Kuangda Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuangda Technology has no effect on the direction of Hunan Investment i.e., Hunan Investment and Kuangda Technology go up and down completely randomly.
Pair Corralation between Hunan Investment and Kuangda Technology
Assuming the 90 days trading horizon Hunan Investment Group is expected to under-perform the Kuangda Technology. But the stock apears to be less risky and, when comparing its historical volatility, Hunan Investment Group is 1.5 times less risky than Kuangda Technology. The stock trades about -0.08 of its potential returns per unit of risk. The Kuangda Technology Group is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 529.00 in Kuangda Technology Group on October 30, 2024 and sell it today you would lose (39.00) from holding Kuangda Technology Group or give up 7.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan Investment Group vs. Kuangda Technology Group
Performance |
| Timeline |
| Hunan Investment |
| Kuangda Technology |
Hunan Investment and Kuangda Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Investment and Kuangda Technology
The main advantage of trading using opposite Hunan Investment and Kuangda Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Investment position performs unexpectedly, Kuangda Technology 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 Kuangda Technology will offset losses from the drop in Kuangda Technology's long position.| Hunan Investment vs. Zhongshan Public Utilities | Hunan Investment vs. Xiangyang Automobile Bearing | Hunan Investment vs. Advanced Technology Materials | Hunan Investment vs. Nanya New Material |
| Kuangda Technology vs. PetroChina Co Ltd | Kuangda Technology vs. China Mobile Limited | Kuangda Technology vs. CNOOC Limited | Kuangda Technology vs. Ping An Insurance |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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