Correlation Between Zhejiang Construction and Huaxia Fund
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By analyzing existing cross correlation between Zhejiang Construction Investment and Huaxia Fund Management, you can compare the effects of market volatilities on Zhejiang Construction 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 Zhejiang Construction with a short position of Huaxia Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Construction and Huaxia Fund.
Diversification Opportunities for Zhejiang Construction and Huaxia Fund
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zhejiang and Huaxia is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Construction Investme 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 Zhejiang Construction 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 Zhejiang Construction Investment 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 Zhejiang Construction i.e., Zhejiang Construction and Huaxia Fund go up and down completely randomly.
Pair Corralation between Zhejiang Construction and Huaxia Fund
Assuming the 90 days trading horizon Zhejiang Construction Investment is expected to under-perform the Huaxia Fund. In addition to that, Zhejiang Construction is 2.87 times more volatile than Huaxia Fund Management. It trades about -0.06 of its total potential returns per unit of risk. Huaxia Fund Management is currently generating about 0.05 per unit of volatility. If you would invest 247.00 in Huaxia Fund Management on October 14, 2024 and sell it today you would earn a total of 60.00 from holding Huaxia Fund Management or generate 24.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Zhejiang Construction Investme vs. Huaxia Fund Management
Performance |
| Timeline |
| Zhejiang Construction |
| Huaxia Fund Management |
Zhejiang Construction and Huaxia Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Construction and Huaxia Fund
The main advantage of trading using opposite Zhejiang Construction and Huaxia Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Construction 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 Zhejiang Construction Investment 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.
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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