Correlation Between Hunan Valin and China World
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By analyzing existing cross correlation between Hunan Valin Steel and China World Trade, you can compare the effects of market volatilities on Hunan Valin and China World 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 Valin with a short position of China World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Valin and China World.
Diversification Opportunities for Hunan Valin and China World
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hunan and China is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Valin Steel and China World Trade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China World Trade and Hunan Valin 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 Valin Steel are associated (or correlated) with China World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China World Trade has no effect on the direction of Hunan Valin i.e., Hunan Valin and China World go up and down completely randomly.
Pair Corralation between Hunan Valin and China World
Assuming the 90 days trading horizon Hunan Valin is expected to generate 4.6 times less return on investment than China World. In addition to that, Hunan Valin is 1.48 times more volatile than China World Trade. It trades about 0.01 of its total potential returns per unit of risk. China World Trade is currently generating about 0.08 per unit of volatility. If you would invest 2,131 in China World Trade on September 5, 2024 and sell it today you would earn a total of 244.00 from holding China World Trade or generate 11.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan Valin Steel vs. China World Trade
Performance |
| Timeline |
| Hunan Valin Steel |
| China World Trade |
Hunan Valin and China World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Valin and China World
The main advantage of trading using opposite Hunan Valin and China World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Valin position performs unexpectedly, China World 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 World will offset losses from the drop in China World's long position.| Hunan Valin vs. China World Trade | Hunan Valin vs. Guocheng Mining Co | Hunan Valin vs. Beijing HuaYuanYiTong Thermal | Hunan Valin vs. Chengtun Mining Group |
| China World vs. Shenzhen Noposion Agrochemicals | China World vs. Offcn Education Technology | China World vs. Heilongjiang Publishing Media | China World vs. Shuhua Sports Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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