Correlation Between Kuangda Technology and HUAQIN TECHNOLOGY
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By analyzing existing cross correlation between Kuangda Technology Group and HUAQIN TECHNOLOGY LTD, you can compare the effects of market volatilities on Kuangda Technology and HUAQIN TECHNOLOGY 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 Kuangda Technology with a short position of HUAQIN TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuangda Technology and HUAQIN TECHNOLOGY.
Diversification Opportunities for Kuangda Technology and HUAQIN TECHNOLOGY
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kuangda and HUAQIN is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kuangda Technology Group and HUAQIN TECHNOLOGY LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUAQIN TECHNOLOGY LTD and Kuangda Technology 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 Kuangda Technology Group are associated (or correlated) with HUAQIN TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUAQIN TECHNOLOGY LTD has no effect on the direction of Kuangda Technology i.e., Kuangda Technology and HUAQIN TECHNOLOGY go up and down completely randomly.
Pair Corralation between Kuangda Technology and HUAQIN TECHNOLOGY
Assuming the 90 days trading horizon Kuangda Technology is expected to generate 1.94 times less return on investment than HUAQIN TECHNOLOGY. But when comparing it to its historical volatility, Kuangda Technology Group is 1.01 times less risky than HUAQIN TECHNOLOGY. It trades about 0.04 of its potential returns per unit of risk. HUAQIN TECHNOLOGY LTD is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5,183 in HUAQIN TECHNOLOGY LTD on October 12, 2024 and sell it today you would earn a total of 1,855 from holding HUAQIN TECHNOLOGY LTD or generate 35.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuangda Technology Group vs. HUAQIN TECHNOLOGY LTD
Performance |
| Timeline |
| Kuangda Technology |
| HUAQIN TECHNOLOGY LTD |
Kuangda Technology and HUAQIN TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuangda Technology and HUAQIN TECHNOLOGY
The main advantage of trading using opposite Kuangda Technology and HUAQIN TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuangda Technology position performs unexpectedly, HUAQIN TECHNOLOGY 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 HUAQIN TECHNOLOGY will offset losses from the drop in HUAQIN TECHNOLOGY's long position.| Kuangda Technology vs. Kuang Chi Technologies | Kuangda Technology vs. Shanghai Shibei Hi Tech | Kuangda Technology vs. Hangzhou Arcvideo Technology | Kuangda Technology vs. Harbin Air Conditioning |
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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 Stocks Directory module to find actively traded stocks across global markets.
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