Correlation Between Huafa Industrial and Xiangyang Automobile
Specify exactly 2 symbols:
By analyzing existing cross correlation between Huafa Industrial Co and Xiangyang Automobile Bearing, you can compare the effects of market volatilities on Huafa Industrial and Xiangyang Automobile 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 Xiangyang Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and Xiangyang Automobile.
Diversification Opportunities for Huafa Industrial and Xiangyang Automobile
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huafa and Xiangyang is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and Xiangyang Automobile Bearing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangyang Automobile 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 Xiangyang Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangyang Automobile has no effect on the direction of Huafa Industrial i.e., Huafa Industrial and Xiangyang Automobile go up and down completely randomly.
Pair Corralation between Huafa Industrial and Xiangyang Automobile
Assuming the 90 days trading horizon Huafa Industrial Co is expected to under-perform the Xiangyang Automobile. But the stock apears to be less risky and, when comparing its historical volatility, Huafa Industrial Co is 1.92 times less risky than Xiangyang Automobile. The stock trades about -0.07 of its potential returns per unit of risk. The Xiangyang Automobile Bearing is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 580.00 in Xiangyang Automobile Bearing on September 2, 2024 and sell it today you would earn a total of 19.00 from holding Xiangyang Automobile Bearing or generate 3.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huafa Industrial Co vs. Xiangyang Automobile Bearing
Performance |
| Timeline |
| Huafa Industrial |
| Xiangyang Automobile |
Huafa Industrial and Xiangyang Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and Xiangyang Automobile
The main advantage of trading using opposite Huafa Industrial and Xiangyang Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial position performs unexpectedly, Xiangyang Automobile 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 Xiangyang Automobile will offset losses from the drop in Xiangyang Automobile's long position.| Huafa Industrial vs. Ningbo Fangzheng Automobile | Huafa Industrial vs. Anhui Jianghuai Automobile | Huafa Industrial vs. Jinhe Biotechnology Co | Huafa Industrial vs. Guangzhou KingTeller Technology |
| Xiangyang Automobile vs. BYD Co Ltd | Xiangyang Automobile vs. China Mobile Limited | Xiangyang Automobile vs. Agricultural Bank of | Xiangyang Automobile vs. Industrial and Commercial |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |