Correlation Between Huafa Industrial and New Hope
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By analyzing existing cross correlation between Huafa Industrial Co and New Hope Dairy, you can compare the effects of market volatilities on Huafa Industrial and New Hope 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 New Hope. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and New Hope.
Diversification Opportunities for Huafa Industrial and New Hope
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huafa and New is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and New Hope Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Hope Dairy 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 New Hope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Hope Dairy has no effect on the direction of Huafa Industrial i.e., Huafa Industrial and New Hope go up and down completely randomly.
Pair Corralation between Huafa Industrial and New Hope
Assuming the 90 days trading horizon Huafa Industrial Co is expected to under-perform the New Hope. But the stock apears to be less risky and, when comparing its historical volatility, Huafa Industrial Co is 2.25 times less risky than New Hope. The stock trades about -0.08 of its potential returns per unit of risk. The New Hope Dairy is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,325 in New Hope Dairy on September 12, 2024 and sell it today you would earn a total of 164.00 from holding New Hope Dairy or generate 12.38% 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. New Hope Dairy
Performance |
| Timeline |
| Huafa Industrial |
| New Hope Dairy |
Huafa Industrial and New Hope Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and New Hope
The main advantage of trading using opposite Huafa Industrial and New Hope positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial position performs unexpectedly, New Hope 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 New Hope will offset losses from the drop in New Hope'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 |
| New Hope vs. China Petroleum Chemical | New Hope vs. PetroChina Co Ltd | New Hope vs. China State Construction | New Hope vs. China Railway Group |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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