Correlation Between China World and Tibet Huayu
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By analyzing existing cross correlation between China World Trade and Tibet Huayu Mining, you can compare the effects of market volatilities on China World and Tibet Huayu 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 World with a short position of Tibet Huayu. Check out your portfolio center. Please also check ongoing floating volatility patterns of China World and Tibet Huayu.
Diversification Opportunities for China World and Tibet Huayu
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Tibet is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding China World Trade and Tibet Huayu Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tibet Huayu Mining and China World 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 World Trade are associated (or correlated) with Tibet Huayu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tibet Huayu Mining has no effect on the direction of China World i.e., China World and Tibet Huayu go up and down completely randomly.
Pair Corralation between China World and Tibet Huayu
Assuming the 90 days trading horizon China World Trade is expected to under-perform the Tibet Huayu. But the stock apears to be less risky and, when comparing its historical volatility, China World Trade is 3.62 times less risky than Tibet Huayu. The stock trades about -0.19 of its potential returns per unit of risk. The Tibet Huayu Mining is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,249 in Tibet Huayu Mining on August 29, 2024 and sell it today you would earn a total of 186.00 from holding Tibet Huayu Mining or generate 14.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China World Trade vs. Tibet Huayu Mining
Performance |
| Timeline |
| China World Trade |
| Tibet Huayu Mining |
China World and Tibet Huayu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China World and Tibet Huayu
The main advantage of trading using opposite China World and Tibet Huayu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China World position performs unexpectedly, Tibet Huayu 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 Tibet Huayu will offset losses from the drop in Tibet Huayu's long position.| China World vs. Industrial and Commercial | China World vs. China Construction Bank | China World vs. Bank of China | China World vs. Agricultural Bank of |
| Tibet Huayu vs. Zijin Mining Group | Tibet Huayu vs. Wanhua Chemical Group | Tibet Huayu vs. Baoshan Iron Steel | Tibet Huayu vs. Shandong Gold Mining |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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