Correlation Between Huafa Industrial and Shanghai Metersbonwe
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By analyzing existing cross correlation between Huafa Industrial Co and Shanghai Metersbonwe FashionAccessories, you can compare the effects of market volatilities on Huafa Industrial and Shanghai Metersbonwe 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 Shanghai Metersbonwe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and Shanghai Metersbonwe.
Diversification Opportunities for Huafa Industrial and Shanghai Metersbonwe
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huafa and Shanghai is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and Shanghai Metersbonwe FashionAc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Metersbonwe 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 Shanghai Metersbonwe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Metersbonwe has no effect on the direction of Huafa Industrial i.e., Huafa Industrial and Shanghai Metersbonwe go up and down completely randomly.
Pair Corralation between Huafa Industrial and Shanghai Metersbonwe
Assuming the 90 days trading horizon Huafa Industrial is expected to generate 1.9 times less return on investment than Shanghai Metersbonwe. But when comparing it to its historical volatility, Huafa Industrial Co is 1.13 times less risky than Shanghai Metersbonwe. It trades about 0.12 of its potential returns per unit of risk. Shanghai Metersbonwe FashionAccessories is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 137.00 in Shanghai Metersbonwe FashionAccessories on September 2, 2024 and sell it today you would earn a total of 65.00 from holding Shanghai Metersbonwe FashionAccessories or generate 47.45% 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. Shanghai Metersbonwe FashionAc
Performance |
| Timeline |
| Huafa Industrial |
| Shanghai Metersbonwe |
Huafa Industrial and Shanghai Metersbonwe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and Shanghai Metersbonwe
The main advantage of trading using opposite Huafa Industrial and Shanghai Metersbonwe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial position performs unexpectedly, Shanghai Metersbonwe 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 Shanghai Metersbonwe will offset losses from the drop in Shanghai Metersbonwe'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 |
| Shanghai Metersbonwe vs. Cultural Investment Holdings | Shanghai Metersbonwe vs. Gome Telecom Equipment | Shanghai Metersbonwe vs. Bus Online Co | Shanghai Metersbonwe vs. Holitech Technology 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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