Correlation Between Huafa Industrial and Xiwang Foodstuffs
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By analyzing existing cross correlation between Huafa Industrial Co and Xiwang Foodstuffs Co, you can compare the effects of market volatilities on Huafa Industrial and Xiwang Foodstuffs 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 Xiwang Foodstuffs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and Xiwang Foodstuffs.
Diversification Opportunities for Huafa Industrial and Xiwang Foodstuffs
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Huafa and Xiwang is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and Xiwang Foodstuffs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiwang Foodstuffs 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 Xiwang Foodstuffs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiwang Foodstuffs has no effect on the direction of Huafa Industrial i.e., Huafa Industrial and Xiwang Foodstuffs go up and down completely randomly.
Pair Corralation between Huafa Industrial and Xiwang Foodstuffs
Assuming the 90 days trading horizon Huafa Industrial Co is expected to under-perform the Xiwang Foodstuffs. But the stock apears to be less risky and, when comparing its historical volatility, Huafa Industrial Co is 1.84 times less risky than Xiwang Foodstuffs. The stock trades about 0.0 of its potential returns per unit of risk. The Xiwang Foodstuffs Co is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 272.00 in Xiwang Foodstuffs Co on August 28, 2024 and sell it today you would earn a total of 114.00 from holding Xiwang Foodstuffs Co or generate 41.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huafa Industrial Co vs. Xiwang Foodstuffs Co
Performance |
| Timeline |
| Huafa Industrial |
| Xiwang Foodstuffs |
Huafa Industrial and Xiwang Foodstuffs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and Xiwang Foodstuffs
The main advantage of trading using opposite Huafa Industrial and Xiwang Foodstuffs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial position performs unexpectedly, Xiwang Foodstuffs 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 Xiwang Foodstuffs will offset losses from the drop in Xiwang Foodstuffs' long position.| Huafa Industrial vs. Industrial and Commercial | Huafa Industrial vs. China Construction Bank | Huafa Industrial vs. Bank of China | Huafa Industrial vs. Agricultural Bank of |
| Xiwang Foodstuffs vs. China Petroleum Chemical | Xiwang Foodstuffs vs. PetroChina Co Ltd | Xiwang Foodstuffs vs. China State Construction | Xiwang Foodstuffs vs. China Railway 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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