Correlation Between Xiamen CD and Huafa Industrial
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By analyzing existing cross correlation between Xiamen CD and Huafa Industrial Co, you can compare the effects of market volatilities on Xiamen CD and Huafa 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 Xiamen CD with a short position of Huafa Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen CD and Huafa Industrial.
Diversification Opportunities for Xiamen CD and Huafa Industrial
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Xiamen and Huafa is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen CD and Huafa Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huafa Industrial and Xiamen CD 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 Xiamen CD are associated (or correlated) with Huafa Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huafa Industrial has no effect on the direction of Xiamen CD i.e., Xiamen CD and Huafa Industrial go up and down completely randomly.
Pair Corralation between Xiamen CD and Huafa Industrial
Assuming the 90 days trading horizon Xiamen CD is expected to generate 1.29 times more return on investment than Huafa Industrial. However, Xiamen CD is 1.29 times more volatile than Huafa Industrial Co. It trades about -0.12 of its potential returns per unit of risk. Huafa Industrial Co is currently generating about -0.25 per unit of risk. If you would invest 1,004 in Xiamen CD on November 2, 2024 and sell it today you would lose (45.00) from holding Xiamen CD or give up 4.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiamen CD vs. Huafa Industrial Co
Performance |
| Timeline |
| Xiamen CD |
| Huafa Industrial |
Xiamen CD and Huafa Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiamen CD and Huafa Industrial
The main advantage of trading using opposite Xiamen CD and Huafa Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen CD position performs unexpectedly, Huafa 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 Huafa Industrial will offset losses from the drop in Huafa Industrial's long position.| Xiamen CD vs. Shanghai Rongtai Health | Xiamen CD vs. YiDong Electronics Technology | Xiamen CD vs. Youngy Health Co | Xiamen CD vs. Everjoy Health Group |
| Huafa Industrial vs. Spring Airlines Co | Huafa Industrial vs. Chengtun Mining Group | Huafa Industrial vs. Xinjiang Baodi Mining | Huafa Industrial vs. North Copper Shanxi |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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