Correlation Between Changchun High and Huagong Tech
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By analyzing existing cross correlation between Changchun High New and Huagong Tech Co, you can compare the effects of market volatilities on Changchun High and Huagong Tech 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 Changchun High with a short position of Huagong Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun High and Huagong Tech.
Diversification Opportunities for Changchun High and Huagong Tech
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changchun and Huagong is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Changchun High New and Huagong Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huagong Tech and Changchun High 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 Changchun High New are associated (or correlated) with Huagong Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huagong Tech has no effect on the direction of Changchun High i.e., Changchun High and Huagong Tech go up and down completely randomly.
Pair Corralation between Changchun High and Huagong Tech
Assuming the 90 days trading horizon Changchun High New is expected to under-perform the Huagong Tech. But the stock apears to be less risky and, when comparing its historical volatility, Changchun High New is 1.58 times less risky than Huagong Tech. The stock trades about -0.19 of its potential returns per unit of risk. The Huagong Tech Co is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 3,510 in Huagong Tech Co on September 27, 2024 and sell it today you would earn a total of 493.00 from holding Huagong Tech Co or generate 14.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Changchun High New vs. Huagong Tech Co
Performance |
| Timeline |
| Changchun High New |
| Huagong Tech |
Changchun High and Huagong Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun High and Huagong Tech
The main advantage of trading using opposite Changchun High and Huagong Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun High position performs unexpectedly, Huagong Tech 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 Huagong Tech will offset losses from the drop in Huagong Tech's long position.| Changchun High vs. Jiangsu Xinri E Vehicle | Changchun High vs. CIMC Vehicles Co | Changchun High vs. Guangzhou Ruoyuchen Information | Changchun High vs. Jiugui Liquor Co |
| Huagong Tech vs. Industrial and Commercial | Huagong Tech vs. China Construction Bank | Huagong Tech vs. Agricultural Bank of | Huagong Tech vs. Bank of China |
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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