Correlation Between Huafa Industrial and Central China
Specify exactly 2 symbols:
By analyzing existing cross correlation between Huafa Industrial Co and Central China Land, you can compare the effects of market volatilities on Huafa Industrial and Central China 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 Central China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and Central China.
Diversification Opportunities for Huafa Industrial and Central China
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Huafa and Central is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and Central China Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central China Land 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 Central China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central China Land has no effect on the direction of Huafa Industrial i.e., Huafa Industrial and Central China go up and down completely randomly.
Pair Corralation between Huafa Industrial and Central China
Assuming the 90 days trading horizon Huafa Industrial Co is expected to under-perform the Central China. But the stock apears to be less risky and, when comparing its historical volatility, Huafa Industrial Co is 1.25 times less risky than Central China. The stock trades about -0.12 of its potential returns per unit of risk. The Central China Land is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,141 in Central China Land on August 25, 2024 and sell it today you would lose (25.00) from holding Central China Land or give up 2.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huafa Industrial Co vs. Central China Land
Performance |
| Timeline |
| Huafa Industrial |
| Central China Land |
Huafa Industrial and Central China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and Central China
The main advantage of trading using opposite Huafa Industrial and Central China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial position performs unexpectedly, Central China 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 Central China will offset losses from the drop in Central China's 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 |
| Central China vs. China State Construction | Central China vs. Huafa Industrial Co | Central China vs. China International Capital | Central China vs. Kweichow Moutai Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |