Correlation Between Hua Xia and Zhejiang Kingland
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By analyzing existing cross correlation between Hua Xia Bank and Zhejiang Kingland Pipeline, you can compare the effects of market volatilities on Hua Xia and Zhejiang Kingland 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 Zhejiang Kingland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Xia and Zhejiang Kingland.
Diversification Opportunities for Hua Xia and Zhejiang Kingland
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hua and Zhejiang is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hua Xia Bank and Zhejiang Kingland Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Kingland 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 Zhejiang Kingland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Kingland has no effect on the direction of Hua Xia i.e., Hua Xia and Zhejiang Kingland go up and down completely randomly.
Pair Corralation between Hua Xia and Zhejiang Kingland
Assuming the 90 days trading horizon Hua Xia Bank is expected to generate 0.87 times more return on investment than Zhejiang Kingland. However, Hua Xia Bank is 1.15 times less risky than Zhejiang Kingland. It trades about 0.09 of its potential returns per unit of risk. Zhejiang Kingland Pipeline is currently generating about 0.02 per unit of risk. If you would invest 615.00 in Hua Xia Bank on October 13, 2024 and sell it today you would earn a total of 133.00 from holding Hua Xia Bank or generate 21.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hua Xia Bank vs. Zhejiang Kingland Pipeline
Performance |
| Timeline |
| Hua Xia Bank |
| Zhejiang Kingland |
Hua Xia and Zhejiang Kingland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Xia and Zhejiang Kingland
The main advantage of trading using opposite Hua Xia and Zhejiang Kingland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Xia position performs unexpectedly, Zhejiang Kingland 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 Zhejiang Kingland will offset losses from the drop in Zhejiang Kingland's long position.| Hua Xia vs. TongFu Microelectronics Co | Hua Xia vs. Shanghai Rightongene Biotechnology | Hua Xia vs. Maccura Biotechnology Co | Hua Xia vs. Jiangsu Jinling Sports |
| Zhejiang Kingland vs. Suzhou Industrial Park | Zhejiang Kingland vs. Miracll Chemicals Co | Zhejiang Kingland vs. Xinxiang Chemical Fiber | Zhejiang Kingland vs. China Minmetals Rare |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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