Correlation Between Hua Xia and Xinjiang Communications
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By analyzing existing cross correlation between Hua Xia Bank and Xinjiang Communications Construction, you can compare the effects of market volatilities on Hua Xia and Xinjiang Communications 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 Xinjiang Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Xia and Xinjiang Communications.
Diversification Opportunities for Hua Xia and Xinjiang Communications
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hua and Xinjiang is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hua Xia Bank and Xinjiang Communications Constr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Communications 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 Xinjiang Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Communications has no effect on the direction of Hua Xia i.e., Hua Xia and Xinjiang Communications go up and down completely randomly.
Pair Corralation between Hua Xia and Xinjiang Communications
Assuming the 90 days trading horizon Hua Xia Bank is expected to generate 0.55 times more return on investment than Xinjiang Communications. However, Hua Xia Bank is 1.83 times less risky than Xinjiang Communications. It trades about 0.09 of its potential returns per unit of risk. Xinjiang Communications Construction is currently generating about 0.01 per unit of risk. If you would invest 577.00 in Hua Xia Bank on September 12, 2024 and sell it today you would earn a total of 205.00 from holding Hua Xia Bank or generate 35.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hua Xia Bank vs. Xinjiang Communications Constr
Performance |
| Timeline |
| Hua Xia Bank |
| Xinjiang Communications |
Hua Xia and Xinjiang Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Xia and Xinjiang Communications
The main advantage of trading using opposite Hua Xia and Xinjiang Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Xia position performs unexpectedly, Xinjiang Communications 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 Xinjiang Communications will offset losses from the drop in Xinjiang Communications' 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 |
| Xinjiang Communications vs. Agricultural Bank of | Xinjiang Communications vs. Industrial and Commercial | Xinjiang Communications vs. Bank of China | Xinjiang Communications vs. PetroChina Co Ltd |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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