Correlation Between Harbin Air and ZTE Corp
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By analyzing existing cross correlation between Harbin Air Conditioning and ZTE Corp, you can compare the effects of market volatilities on Harbin Air and ZTE 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 Harbin Air with a short position of ZTE Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbin Air and ZTE Corp.
Diversification Opportunities for Harbin Air and ZTE Corp
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harbin and ZTE is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Harbin Air Conditioning and ZTE Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTE Corp and Harbin Air 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 Harbin Air Conditioning are associated (or correlated) with ZTE Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZTE Corp has no effect on the direction of Harbin Air i.e., Harbin Air and ZTE Corp go up and down completely randomly.
Pair Corralation between Harbin Air and ZTE Corp
Assuming the 90 days trading horizon Harbin Air is expected to generate 2.31 times less return on investment than ZTE Corp. In addition to that, Harbin Air is 1.34 times more volatile than ZTE Corp. It trades about 0.06 of its total potential returns per unit of risk. ZTE Corp is currently generating about 0.18 per unit of volatility. If you would invest 3,615 in ZTE Corp on October 22, 2024 and sell it today you would earn a total of 512.00 from holding ZTE Corp or generate 14.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harbin Air Conditioning vs. ZTE Corp
Performance |
| Timeline |
| Harbin Air Conditioning |
| ZTE Corp |
Harbin Air and ZTE Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harbin Air and ZTE Corp
The main advantage of trading using opposite Harbin Air and ZTE Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbin Air position performs unexpectedly, ZTE 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 ZTE Corp will offset losses from the drop in ZTE Corp's long position.| Harbin Air vs. Xiangyu Medical Co | Harbin Air vs. Easyhome New Retail | Harbin Air vs. JCHX Mining Management | Harbin Air vs. Jiangsu Financial Leasing |
| ZTE Corp vs. Shandong Longquan Pipeline | ZTE Corp vs. Nanning Chemical Industry | ZTE Corp vs. Songz Automobile Air | ZTE Corp vs. China Mobile Limited |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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