Correlation Between Huafa Industrial and Nanhua Bio
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By analyzing existing cross correlation between Huafa Industrial Co and Nanhua Bio Medicine, you can compare the effects of market volatilities on Huafa Industrial and Nanhua Bio 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 Huafa Industrial with a short position of Nanhua Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and Nanhua Bio.
Diversification Opportunities for Huafa Industrial and Nanhua Bio
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huafa and Nanhua is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and Nanhua Bio Medicine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanhua Bio Medicine and Huafa Industrial 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 Huafa Industrial Co are associated (or correlated) with Nanhua Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanhua Bio Medicine has no effect on the direction of Huafa Industrial i.e., Huafa Industrial and Nanhua Bio go up and down completely randomly.
Pair Corralation between Huafa Industrial and Nanhua Bio
Assuming the 90 days trading horizon Huafa Industrial Co is expected to under-perform the Nanhua Bio. But the stock apears to be less risky and, when comparing its historical volatility, Huafa Industrial Co is 1.64 times less risky than Nanhua Bio. The stock trades about -0.08 of its potential returns per unit of risk. The Nanhua Bio Medicine is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,038 in Nanhua Bio Medicine on August 30, 2024 and sell it today you would lose (11.00) from holding Nanhua Bio Medicine or give up 1.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huafa Industrial Co vs. Nanhua Bio Medicine
Performance |
| Timeline |
| Huafa Industrial |
| Nanhua Bio Medicine |
Huafa Industrial and Nanhua Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and Nanhua Bio
The main advantage of trading using opposite Huafa Industrial and Nanhua Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial position performs unexpectedly, Nanhua Bio 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 Nanhua Bio will offset losses from the drop in Nanhua Bio's long position.| Huafa Industrial vs. Cambricon Technologies Corp | Huafa Industrial vs. Empyrean Technology Co | Huafa Industrial vs. Kuang Chi Technologies | Huafa Industrial vs. Gansu Jiu Steel |
| Nanhua Bio vs. Yili Chuanning Biotechnology | Nanhua Bio vs. Advanced Technology Materials | Nanhua Bio vs. GRIPM Advanced Materials | Nanhua Bio vs. Guangzhou Tinci Materials |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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