Correlation Between China Securities and Weihai Honglin
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By analyzing existing cross correlation between China Securities 800 and Weihai Honglin Electronic, you can compare the effects of market volatilities on China Securities and Weihai Honglin 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 Securities with a short position of Weihai Honglin. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Weihai Honglin.
Diversification Opportunities for China Securities and Weihai Honglin
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Weihai is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Weihai Honglin Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weihai Honglin Electronic and China Securities 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 Securities 800 are associated (or correlated) with Weihai Honglin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weihai Honglin Electronic has no effect on the direction of China Securities i.e., China Securities and Weihai Honglin go up and down completely randomly.
Pair Corralation between China Securities and Weihai Honglin
Assuming the 90 days trading horizon China Securities 800 is expected to generate 0.69 times more return on investment than Weihai Honglin. However, China Securities 800 is 1.45 times less risky than Weihai Honglin. It trades about -0.11 of its potential returns per unit of risk. Weihai Honglin Electronic is currently generating about -0.18 per unit of risk. If you would invest 427,943 in China Securities 800 on August 29, 2024 and sell it today you would lose (15,836) from holding China Securities 800 or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. Weihai Honglin Electronic
Performance |
| Timeline |
China Securities and Weihai Honglin Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Weihai Honglin Electronic
Pair trading matchups for Weihai Honglin
Pair Trading with China Securities and Weihai Honglin
The main advantage of trading using opposite China Securities and Weihai Honglin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Weihai Honglin 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 Weihai Honglin will offset losses from the drop in Weihai Honglin's long position.| China Securities vs. Tibet Huayu Mining | China Securities vs. Keeson Technology Corp | China Securities vs. OBiO Technology Corp | China Securities vs. ROPEOK Technology Group |
| Weihai Honglin vs. PetroChina Co Ltd | Weihai Honglin vs. China State Construction | Weihai Honglin vs. China Mobile Limited | Weihai Honglin vs. Industrial and Commercial |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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