Correlation Between Huafa Industrial and Wangneng Environment
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By analyzing existing cross correlation between Huafa Industrial Co and Wangneng Environment Co, you can compare the effects of market volatilities on Huafa Industrial and Wangneng Environment 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 Wangneng Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and Wangneng Environment.
Diversification Opportunities for Huafa Industrial and Wangneng Environment
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Huafa and Wangneng is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and Wangneng Environment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wangneng Environment 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 Wangneng Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wangneng Environment has no effect on the direction of Huafa Industrial i.e., Huafa Industrial and Wangneng Environment go up and down completely randomly.
Pair Corralation between Huafa Industrial and Wangneng Environment
Assuming the 90 days trading horizon Huafa Industrial Co is expected to under-perform the Wangneng Environment. In addition to that, Huafa Industrial is 1.71 times more volatile than Wangneng Environment Co. It trades about -0.03 of its total potential returns per unit of risk. Wangneng Environment Co is currently generating about 0.02 per unit of volatility. If you would invest 1,481 in Wangneng Environment Co on August 31, 2024 and sell it today you would earn a total of 85.00 from holding Wangneng Environment Co or generate 5.74% 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. Wangneng Environment Co
Performance |
| Timeline |
| Huafa Industrial |
| Wangneng Environment |
Huafa Industrial and Wangneng Environment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and Wangneng Environment
The main advantage of trading using opposite Huafa Industrial and Wangneng Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial position performs unexpectedly, Wangneng Environment 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 Wangneng Environment will offset losses from the drop in Wangneng Environment's long position.| Huafa Industrial vs. Kweichow Moutai Co | Huafa Industrial vs. Contemporary Amperex Technology | Huafa Industrial vs. G bits Network Technology | Huafa Industrial vs. BYD Co Ltd |
| Wangneng Environment vs. China State Construction | Wangneng Environment vs. China Merchants Shekou | Wangneng Environment vs. Huafa Industrial Co | Wangneng Environment vs. China International Capital |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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