Correlation Between China Fund and Henan Lantian
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By analyzing existing cross correlation between China Fund Management and Henan Lantian Gas, you can compare the effects of market volatilities on China Fund and Henan Lantian 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 China Fund with a short position of Henan Lantian. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Fund and Henan Lantian.
Diversification Opportunities for China Fund and Henan Lantian
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Henan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding China Fund Management and Henan Lantian Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henan Lantian Gas and China Fund 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 China Fund Management are associated (or correlated) with Henan Lantian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henan Lantian Gas has no effect on the direction of China Fund i.e., China Fund and Henan Lantian go up and down completely randomly.
Pair Corralation between China Fund and Henan Lantian
Assuming the 90 days trading horizon China Fund is expected to generate 2.52 times less return on investment than Henan Lantian. But when comparing it to its historical volatility, China Fund Management is 2.77 times less risky than Henan Lantian. It trades about 0.06 of its potential returns per unit of risk. Henan Lantian Gas is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 823.00 in Henan Lantian Gas on August 29, 2024 and sell it today you would earn a total of 314.00 from holding Henan Lantian Gas or generate 38.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Fund Management vs. Henan Lantian Gas
Performance |
| Timeline |
| China Fund Management |
| Henan Lantian Gas |
China Fund and Henan Lantian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Fund and Henan Lantian
The main advantage of trading using opposite China Fund and Henan Lantian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Fund position performs unexpectedly, Henan Lantian 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 Henan Lantian will offset losses from the drop in Henan Lantian's long position.| China Fund vs. Industrial and Commercial | China Fund vs. Kweichow Moutai Co | China Fund vs. Agricultural Bank of | China Fund vs. China Mobile Limited |
| Henan Lantian vs. Cambricon Technologies Corp | Henan Lantian vs. Loongson Technology Corp | Henan Lantian vs. Chongqing Road Bridge | Henan Lantian vs. Shenzhen Fortune Trend |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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