Correlation Between Hua Xia and Shenwu Energy
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By analyzing existing cross correlation between Hua Xia Bank and Shenwu Energy Saving, you can compare the effects of market volatilities on Hua Xia and Shenwu Energy 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 Hua Xia with a short position of Shenwu Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Xia and Shenwu Energy.
Diversification Opportunities for Hua Xia and Shenwu Energy
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hua and Shenwu is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hua Xia Bank and Shenwu Energy Saving in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenwu Energy Saving and Hua Xia 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 Hua Xia Bank are associated (or correlated) with Shenwu Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenwu Energy Saving has no effect on the direction of Hua Xia i.e., Hua Xia and Shenwu Energy go up and down completely randomly.
Pair Corralation between Hua Xia and Shenwu Energy
Assuming the 90 days trading horizon Hua Xia Bank is expected to generate 0.4 times more return on investment than Shenwu Energy. However, Hua Xia Bank is 2.51 times less risky than Shenwu Energy. It trades about 0.08 of its potential returns per unit of risk. Shenwu Energy Saving is currently generating about 0.0 per unit of risk. If you would invest 478.00 in Hua Xia Bank on September 14, 2024 and sell it today you would earn a total of 298.00 from holding Hua Xia Bank or generate 62.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hua Xia Bank vs. Shenwu Energy Saving
Performance |
| Timeline |
| Hua Xia Bank |
| Shenwu Energy Saving |
Hua Xia and Shenwu Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Xia and Shenwu Energy
The main advantage of trading using opposite Hua Xia and Shenwu Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Xia position performs unexpectedly, Shenwu Energy 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 Shenwu Energy will offset losses from the drop in Shenwu Energy's long position.| Hua Xia vs. Dymatic Chemicals | Hua Xia vs. Bomesc Offshore Engineering | Hua Xia vs. North Huajin Chemical | Hua Xia vs. Changjiang Publishing Media |
| Shenwu Energy vs. Lutian Machinery Co | Shenwu Energy vs. China Longyuan Power | Shenwu Energy vs. PetroChina Co Ltd | Shenwu Energy vs. Bank of China |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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