Correlation Between Huafa Industrial and Muyuan Foodstuff
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By analyzing existing cross correlation between Huafa Industrial Co and Muyuan Foodstuff Co, you can compare the effects of market volatilities on Huafa Industrial and Muyuan Foodstuff 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 Muyuan Foodstuff. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and Muyuan Foodstuff.
Diversification Opportunities for Huafa Industrial and Muyuan Foodstuff
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Huafa and Muyuan is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and Muyuan Foodstuff Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muyuan Foodstuff 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 Muyuan Foodstuff. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muyuan Foodstuff has no effect on the direction of Huafa Industrial i.e., Huafa Industrial and Muyuan Foodstuff go up and down completely randomly.
Pair Corralation between Huafa Industrial and Muyuan Foodstuff
Assuming the 90 days trading horizon Huafa Industrial Co is expected to generate 1.38 times more return on investment than Muyuan Foodstuff. However, Huafa Industrial is 1.38 times more volatile than Muyuan Foodstuff Co. It trades about -0.03 of its potential returns per unit of risk. Muyuan Foodstuff Co is currently generating about -0.1 per unit of risk. If you would invest 690.00 in Huafa Industrial Co on September 13, 2024 and sell it today you would lose (23.00) from holding Huafa Industrial Co or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huafa Industrial Co vs. Muyuan Foodstuff Co
Performance |
| Timeline |
| Huafa Industrial |
| Muyuan Foodstuff |
Huafa Industrial and Muyuan Foodstuff Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and Muyuan Foodstuff
The main advantage of trading using opposite Huafa Industrial and Muyuan Foodstuff positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial position performs unexpectedly, Muyuan Foodstuff 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 Muyuan Foodstuff will offset losses from the drop in Muyuan Foodstuff's long position.| Huafa Industrial vs. China Life Insurance | Huafa Industrial vs. Cinda Securities Co | Huafa Industrial vs. Piotech Inc A | Huafa Industrial vs. Dongxing Sec Co |
| Muyuan Foodstuff vs. Nanjing Putian Telecommunications | Muyuan Foodstuff vs. Tianjin Realty Development | Muyuan Foodstuff vs. Kangyue Technology Co | Muyuan Foodstuff vs. Shenzhen Hifuture Electric |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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