Correlation Between Hua Xia and Fujian Newland
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By analyzing existing cross correlation between Hua Xia Bank and Fujian Newland Computer, you can compare the effects of market volatilities on Hua Xia and Fujian Newland 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 Fujian Newland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Xia and Fujian Newland.
Diversification Opportunities for Hua Xia and Fujian Newland
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hua and Fujian is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hua Xia Bank and Fujian Newland Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Newland Computer 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 Fujian Newland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Newland Computer has no effect on the direction of Hua Xia i.e., Hua Xia and Fujian Newland go up and down completely randomly.
Pair Corralation between Hua Xia and Fujian Newland
Assuming the 90 days trading horizon Hua Xia Bank is expected to generate 0.49 times more return on investment than Fujian Newland. However, Hua Xia Bank is 2.04 times less risky than Fujian Newland. It trades about -0.14 of its potential returns per unit of risk. Fujian Newland Computer is currently generating about -0.27 per unit of risk. If you would invest 776.00 in Hua Xia Bank on October 13, 2024 and sell it today you would lose (28.00) from holding Hua Xia Bank or give up 3.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hua Xia Bank vs. Fujian Newland Computer
Performance |
| Timeline |
| Hua Xia Bank |
| Fujian Newland Computer |
Hua Xia and Fujian Newland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Xia and Fujian Newland
The main advantage of trading using opposite Hua Xia and Fujian Newland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Xia position performs unexpectedly, Fujian Newland 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 Fujian Newland will offset losses from the drop in Fujian Newland's long position.| Hua Xia vs. Ye Chiu Metal | Hua Xia vs. Anji Foodstuff Co | Hua Xia vs. Shantou Wanshun Package | Hua Xia vs. Shandong Hongchuang Aluminum |
| Fujian Newland vs. Unisplendour Corp | Fujian Newland vs. Huaxia Fund Management | Fujian Newland vs. Hua Xia Bank | Fujian Newland vs. Jiangsu Financial Leasing |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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