Correlation Between Sanquan Food and Huaxia Fund
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By analyzing existing cross correlation between Sanquan Food Co and Huaxia Fund Management, you can compare the effects of market volatilities on Sanquan Food and Huaxia Fund 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 Sanquan Food with a short position of Huaxia Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanquan Food and Huaxia Fund.
Diversification Opportunities for Sanquan Food and Huaxia Fund
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sanquan and Huaxia is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sanquan Food Co and Huaxia Fund Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huaxia Fund Management and Sanquan Food 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 Sanquan Food Co are associated (or correlated) with Huaxia Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huaxia Fund Management has no effect on the direction of Sanquan Food i.e., Sanquan Food and Huaxia Fund go up and down completely randomly.
Pair Corralation between Sanquan Food and Huaxia Fund
Assuming the 90 days trading horizon Sanquan Food Co is expected to under-perform the Huaxia Fund. In addition to that, Sanquan Food is 1.1 times more volatile than Huaxia Fund Management. It trades about -0.01 of its total potential returns per unit of risk. Huaxia Fund Management is currently generating about 0.1 per unit of volatility. If you would invest 303.00 in Huaxia Fund Management on November 7, 2024 and sell it today you would earn a total of 5.00 from holding Huaxia Fund Management or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanquan Food Co vs. Huaxia Fund Management
Performance |
| Timeline |
| Sanquan Food |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Huaxia Fund Management |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Sanquan Food and Huaxia Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanquan Food and Huaxia Fund
The main advantage of trading using opposite Sanquan Food and Huaxia Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanquan Food position performs unexpectedly, Huaxia Fund 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 Huaxia Fund will offset losses from the drop in Huaxia Fund's long position.The idea behind Sanquan Food Co and Huaxia Fund Management pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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