Correlation Between Hunan Investment and China Yangtze
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By analyzing existing cross correlation between Hunan Investment Group and China Yangtze Power, you can compare the effects of market volatilities on Hunan Investment and China Yangtze 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 China Yangtze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Investment and China Yangtze.
Diversification Opportunities for Hunan Investment and China Yangtze
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hunan and China is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Investment Group and China Yangtze Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Yangtze Power 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 China Yangtze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Yangtze Power has no effect on the direction of Hunan Investment i.e., Hunan Investment and China Yangtze go up and down completely randomly.
Pair Corralation between Hunan Investment and China Yangtze
Assuming the 90 days trading horizon Hunan Investment Group is expected to generate 2.33 times more return on investment than China Yangtze. However, Hunan Investment is 2.33 times more volatile than China Yangtze Power. It trades about 0.1 of its potential returns per unit of risk. China Yangtze Power is currently generating about 0.0 per unit of risk. If you would invest 422.00 in Hunan Investment Group on September 1, 2024 and sell it today you would earn a total of 147.00 from holding Hunan Investment Group or generate 34.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Hunan Investment Group vs. China Yangtze Power
Performance |
| Timeline |
| Hunan Investment |
| China Yangtze Power |
Hunan Investment and China Yangtze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Investment and China Yangtze
The main advantage of trading using opposite Hunan Investment and China Yangtze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Investment position performs unexpectedly, China Yangtze 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 China Yangtze will offset losses from the drop in China Yangtze's long position.| Hunan Investment vs. Jiangsu Phoenix Publishing | Hunan Investment vs. Union Semiconductor Co | Hunan Investment vs. China Publishing Media | Hunan Investment vs. GigaDevice SemiconductorBeiji |
| China Yangtze vs. Haima Automobile Group | China Yangtze vs. Shaanxi Construction Machinery | China Yangtze vs. Jiangsu Xinri E Vehicle | China Yangtze vs. Huasi Agricultural Development |
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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