Correlation Between Huafa Industrial and Henan Shuanghui
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By analyzing existing cross correlation between Huafa Industrial Co and Henan Shuanghui Investment, you can compare the effects of market volatilities on Huafa Industrial and Henan Shuanghui 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 Henan Shuanghui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and Henan Shuanghui.
Diversification Opportunities for Huafa Industrial and Henan Shuanghui
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Huafa and Henan is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and Henan Shuanghui Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henan Shuanghui Inve 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 Henan Shuanghui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henan Shuanghui Inve has no effect on the direction of Huafa Industrial i.e., Huafa Industrial and Henan Shuanghui go up and down completely randomly.
Pair Corralation between Huafa Industrial and Henan Shuanghui
Assuming the 90 days trading horizon Huafa Industrial is expected to generate 1.75 times less return on investment than Henan Shuanghui. In addition to that, Huafa Industrial is 1.88 times more volatile than Henan Shuanghui Investment. It trades about 0.01 of its total potential returns per unit of risk. Henan Shuanghui Investment is currently generating about 0.02 per unit of volatility. If you would invest 2,443 in Henan Shuanghui Investment on September 5, 2024 and sell it today you would earn a total of 79.00 from holding Henan Shuanghui Investment or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huafa Industrial Co vs. Henan Shuanghui Investment
Performance |
| Timeline |
| Huafa Industrial |
| Henan Shuanghui Inve |
Huafa Industrial and Henan Shuanghui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and Henan Shuanghui
The main advantage of trading using opposite Huafa Industrial and Henan Shuanghui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial position performs unexpectedly, Henan Shuanghui 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 Henan Shuanghui will offset losses from the drop in Henan Shuanghui's long position.| Huafa Industrial vs. Panda Financial Holding | Huafa Industrial vs. Unisplendour Corp | Huafa Industrial vs. Xiamen Bank Co | Huafa Industrial vs. Guangdong Shenglu Telecommunication |
| Henan Shuanghui vs. Poly Real Estate | Henan Shuanghui vs. China Vanke Co | Henan Shuanghui vs. China Merchants Shekou | Henan Shuanghui vs. Huafa Industrial 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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