Correlation Between China Minsheng and Huali Industrial
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By analyzing existing cross correlation between China Minsheng Banking and Huali Industrial Group, you can compare the effects of market volatilities on China Minsheng and Huali Industrial 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 China Minsheng with a short position of Huali Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Minsheng and Huali Industrial.
Diversification Opportunities for China Minsheng and Huali Industrial
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Huali is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding China Minsheng Banking and Huali Industrial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huali Industrial and China Minsheng 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 China Minsheng Banking are associated (or correlated) with Huali Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huali Industrial has no effect on the direction of China Minsheng i.e., China Minsheng and Huali Industrial go up and down completely randomly.
Pair Corralation between China Minsheng and Huali Industrial
Assuming the 90 days trading horizon China Minsheng is expected to generate 2.07 times less return on investment than Huali Industrial. But when comparing it to its historical volatility, China Minsheng Banking is 1.13 times less risky than Huali Industrial. It trades about 0.11 of its potential returns per unit of risk. Huali Industrial Group is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 6,679 in Huali Industrial Group on September 1, 2024 and sell it today you would earn a total of 702.00 from holding Huali Industrial Group or generate 10.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Minsheng Banking vs. Huali Industrial Group
Performance |
| Timeline |
| China Minsheng Banking |
| Huali Industrial |
China Minsheng and Huali Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Minsheng and Huali Industrial
The main advantage of trading using opposite China Minsheng and Huali Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Minsheng position performs unexpectedly, Huali Industrial 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 Huali Industrial will offset losses from the drop in Huali Industrial's long position.| China Minsheng vs. V V Food | China Minsheng vs. Juewei Food Co | China Minsheng vs. 360 Security Technology | China Minsheng vs. Guangdong Xiongsu Technology |
| Huali Industrial vs. Shaanxi Broadcast TV | Huali Industrial vs. Tonghua Grape Wine | Huali Industrial vs. Chongqing Road Bridge | Huali Industrial vs. Hubeiyichang Transportation Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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