Correlation Between Hota Industrial and Great Wall
Can any of the company-specific risk be diversified away by investing in both Hota Industrial and Great Wall at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hota Industrial and Great Wall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hota Industrial Mfg and Great Wall Enterprise, you can compare the effects of market volatilities on Hota Industrial and Great Wall 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 Hota Industrial with a short position of Great Wall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hota Industrial and Great Wall.
Diversification Opportunities for Hota Industrial and Great Wall
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hota and Great is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hota Industrial Mfg and Great Wall Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Wall Enterprise and Hota Industrial 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 Hota Industrial Mfg are associated (or correlated) with Great Wall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Wall Enterprise has no effect on the direction of Hota Industrial i.e., Hota Industrial and Great Wall go up and down completely randomly.
Pair Corralation between Hota Industrial and Great Wall
Assuming the 90 days trading horizon Hota Industrial Mfg is expected to under-perform the Great Wall. In addition to that, Hota Industrial is 1.82 times more volatile than Great Wall Enterprise. It trades about -0.01 of its total potential returns per unit of risk. Great Wall Enterprise is currently generating about 0.04 per unit of volatility. If you would invest 4,455 in Great Wall Enterprise on September 3, 2024 and sell it today you would earn a total of 875.00 from holding Great Wall Enterprise or generate 19.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hota Industrial Mfg vs. Great Wall Enterprise
Performance |
| Timeline |
| Hota Industrial Mfg |
| Great Wall Enterprise |
Hota Industrial and Great Wall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hota Industrial and Great Wall
The main advantage of trading using opposite Hota Industrial and Great Wall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hota Industrial position performs unexpectedly, Great Wall 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 Great Wall will offset losses from the drop in Great Wall's long position.| Hota Industrial vs. BizLink Holding | Hota Industrial vs. Delta Electronics | Hota Industrial vs. Eclat Textile Co | Hota Industrial vs. Chroma ATE |
| Great Wall vs. Charoen Pokphand Enterprise | Great Wall vs. Uni President Enterprises Corp | Great Wall vs. Lien Hwa Industrial | Great Wall vs. Standard Foods Corp |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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