Correlation Between Huali Industrial and Guangdong Qunxing
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By analyzing existing cross correlation between Huali Industrial Group and Guangdong Qunxing Toys, you can compare the effects of market volatilities on Huali Industrial and Guangdong Qunxing 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 Huali Industrial with a short position of Guangdong Qunxing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huali Industrial and Guangdong Qunxing.
Diversification Opportunities for Huali Industrial and Guangdong Qunxing
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Huali and Guangdong is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Huali Industrial Group and Guangdong Qunxing Toys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Qunxing Toys and Huali 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 Huali Industrial Group are associated (or correlated) with Guangdong Qunxing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Qunxing Toys has no effect on the direction of Huali Industrial i.e., Huali Industrial and Guangdong Qunxing go up and down completely randomly.
Pair Corralation between Huali Industrial and Guangdong Qunxing
Assuming the 90 days trading horizon Huali Industrial is expected to generate 1.55 times less return on investment than Guangdong Qunxing. But when comparing it to its historical volatility, Huali Industrial Group is 1.58 times less risky than Guangdong Qunxing. It trades about 0.19 of its potential returns per unit of risk. Guangdong Qunxing Toys is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 594.00 in Guangdong Qunxing Toys on September 1, 2024 and sell it today you would earn a total of 91.00 from holding Guangdong Qunxing Toys or generate 15.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Huali Industrial Group vs. Guangdong Qunxing Toys
Performance |
| Timeline |
| Huali Industrial |
| Guangdong Qunxing Toys |
Huali Industrial and Guangdong Qunxing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huali Industrial and Guangdong Qunxing
The main advantage of trading using opposite Huali Industrial and Guangdong Qunxing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huali Industrial position performs unexpectedly, Guangdong Qunxing 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 Guangdong Qunxing will offset losses from the drop in Guangdong Qunxing's long position.| Huali Industrial vs. Shaanxi Broadcast TV | Huali Industrial vs. Tonghua Grape Wine | Huali Industrial vs. Chongqing Road Bridge | Huali Industrial vs. Hubeiyichang Transportation Group |
| Guangdong Qunxing vs. Anhui Transport Consulting | Guangdong Qunxing vs. China Publishing Media | Guangdong Qunxing vs. Western Metal Materials | Guangdong Qunxing vs. Tongling Nonferrous Metals |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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