Correlation Between Weihai Honglin and Datang HuaYin
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By analyzing existing cross correlation between Weihai Honglin Electronic and Datang HuaYin Electric, you can compare the effects of market volatilities on Weihai Honglin and Datang HuaYin 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 Weihai Honglin with a short position of Datang HuaYin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weihai Honglin and Datang HuaYin.
Diversification Opportunities for Weihai Honglin and Datang HuaYin
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Weihai and Datang is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Weihai Honglin Electronic and Datang HuaYin Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datang HuaYin Electric and Weihai Honglin 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 Weihai Honglin Electronic are associated (or correlated) with Datang HuaYin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datang HuaYin Electric has no effect on the direction of Weihai Honglin i.e., Weihai Honglin and Datang HuaYin go up and down completely randomly.
Pair Corralation between Weihai Honglin and Datang HuaYin
Assuming the 90 days trading horizon Weihai Honglin Electronic is expected to generate 1.18 times more return on investment than Datang HuaYin. However, Weihai Honglin is 1.18 times more volatile than Datang HuaYin Electric. It trades about 0.13 of its potential returns per unit of risk. Datang HuaYin Electric is currently generating about -0.33 per unit of risk. If you would invest 1,399 in Weihai Honglin Electronic on October 9, 2024 and sell it today you would earn a total of 91.00 from holding Weihai Honglin Electronic or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Weihai Honglin Electronic vs. Datang HuaYin Electric
Performance |
| Timeline |
| Weihai Honglin Electronic |
| Datang HuaYin Electric |
Weihai Honglin and Datang HuaYin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weihai Honglin and Datang HuaYin
The main advantage of trading using opposite Weihai Honglin and Datang HuaYin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weihai Honglin position performs unexpectedly, Datang HuaYin 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 Datang HuaYin will offset losses from the drop in Datang HuaYin's long position.| Weihai Honglin vs. Nexchip Semiconductor Corp | Weihai Honglin vs. Glodon Software Co | Weihai Honglin vs. China National Software | Weihai Honglin vs. Shannon Semiconductor Technology |
| Datang HuaYin vs. Agricultural Bank of | Datang HuaYin vs. Industrial and Commercial | Datang HuaYin vs. Bank of China | Datang HuaYin vs. PetroChina Co Ltd |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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