Correlation Between Harbin Air and Shaanxi Construction
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By analyzing existing cross correlation between Harbin Air Conditioning and Shaanxi Construction Machinery, you can compare the effects of market volatilities on Harbin Air and Shaanxi Construction 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 Shaanxi Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbin Air and Shaanxi Construction.
Diversification Opportunities for Harbin Air and Shaanxi Construction
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Harbin and Shaanxi is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Harbin Air Conditioning and Shaanxi Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Construction 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 Shaanxi Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Construction has no effect on the direction of Harbin Air i.e., Harbin Air and Shaanxi Construction go up and down completely randomly.
Pair Corralation between Harbin Air and Shaanxi Construction
Assuming the 90 days trading horizon Harbin Air Conditioning is expected to generate 0.84 times more return on investment than Shaanxi Construction. However, Harbin Air Conditioning is 1.18 times less risky than Shaanxi Construction. It trades about 0.02 of its potential returns per unit of risk. Shaanxi Construction Machinery is currently generating about -0.02 per unit of risk. If you would invest 486.00 in Harbin Air Conditioning on September 12, 2024 and sell it today you would earn a total of 30.00 from holding Harbin Air Conditioning or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harbin Air Conditioning vs. Shaanxi Construction Machinery
Performance |
| Timeline |
| Harbin Air Conditioning |
| Shaanxi Construction |
Harbin Air and Shaanxi Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harbin Air and Shaanxi Construction
The main advantage of trading using opposite Harbin Air and Shaanxi Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbin Air position performs unexpectedly, Shaanxi Construction 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 Shaanxi Construction will offset losses from the drop in Shaanxi Construction's long position.| Harbin Air vs. Agricultural Bank of | Harbin Air vs. Industrial and Commercial | Harbin Air vs. Bank of China | Harbin Air 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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