Correlation Between Huizhou Desay and Huadong Medicine
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By analyzing existing cross correlation between Huizhou Desay SV and Huadong Medicine Co, you can compare the effects of market volatilities on Huizhou Desay and Huadong Medicine 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 Huizhou Desay with a short position of Huadong Medicine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huizhou Desay and Huadong Medicine.
Diversification Opportunities for Huizhou Desay and Huadong Medicine
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Huizhou and Huadong is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Huizhou Desay SV and Huadong Medicine Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huadong Medicine and Huizhou Desay 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 Huizhou Desay SV are associated (or correlated) with Huadong Medicine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huadong Medicine has no effect on the direction of Huizhou Desay i.e., Huizhou Desay and Huadong Medicine go up and down completely randomly.
Pair Corralation between Huizhou Desay and Huadong Medicine
Assuming the 90 days trading horizon Huizhou Desay SV is expected to under-perform the Huadong Medicine. In addition to that, Huizhou Desay is 1.34 times more volatile than Huadong Medicine Co. It trades about -0.07 of its total potential returns per unit of risk. Huadong Medicine Co is currently generating about -0.02 per unit of volatility. If you would invest 3,381 in Huadong Medicine Co on October 14, 2024 and sell it today you would lose (118.00) from holding Huadong Medicine Co or give up 3.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huizhou Desay SV vs. Huadong Medicine Co
Performance |
| Timeline |
| Huizhou Desay SV |
| Huadong Medicine |
Huizhou Desay and Huadong Medicine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huizhou Desay and Huadong Medicine
The main advantage of trading using opposite Huizhou Desay and Huadong Medicine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huizhou Desay position performs unexpectedly, Huadong Medicine 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 Huadong Medicine will offset losses from the drop in Huadong Medicine's long position.| Huizhou Desay vs. China Satellite Communications | Huizhou Desay vs. Nanjing Putian Telecommunications | Huizhou Desay vs. Guangdong Shenglu Telecommunication | Huizhou Desay vs. Shandong Homey Aquatic |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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