Correlation Between Hua Xia and Foryou Corp
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By analyzing existing cross correlation between Hua Xia Bank and Foryou Corp, you can compare the effects of market volatilities on Hua Xia and Foryou Corp 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 Foryou Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Xia and Foryou Corp.
Diversification Opportunities for Hua Xia and Foryou Corp
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hua and Foryou is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hua Xia Bank and Foryou Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foryou Corp 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 Foryou Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foryou Corp has no effect on the direction of Hua Xia i.e., Hua Xia and Foryou Corp go up and down completely randomly.
Pair Corralation between Hua Xia and Foryou Corp
Assuming the 90 days trading horizon Hua Xia Bank is expected to generate 0.46 times more return on investment than Foryou Corp. However, Hua Xia Bank is 2.2 times less risky than Foryou Corp. It trades about 0.08 of its potential returns per unit of risk. Foryou Corp is currently generating about 0.01 per unit of risk. If you would invest 483.00 in Hua Xia Bank on September 12, 2024 and sell it today you would earn a total of 299.00 from holding Hua Xia Bank or generate 61.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Hua Xia Bank vs. Foryou Corp
Performance |
| Timeline |
| Hua Xia Bank |
| Foryou Corp |
Hua Xia and Foryou Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Xia and Foryou Corp
The main advantage of trading using opposite Hua Xia and Foryou Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Xia position performs unexpectedly, Foryou Corp 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 Foryou Corp will offset losses from the drop in Foryou Corp's long position.| Hua Xia vs. China Petroleum Chemical | Hua Xia vs. PetroChina Co Ltd | Hua Xia vs. China Mobile Limited | Hua Xia vs. Industrial and Commercial |
| Foryou Corp vs. Zhongzhu Medical Holdings | Foryou Corp vs. Guangzhou Boji Medical | Foryou Corp vs. Hua Xia Bank | Foryou Corp vs. Bank of Suzhou |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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