Correlation Between Huafa Industrial and Northking Information
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By analyzing existing cross correlation between Huafa Industrial Co and Northking Information Technology, you can compare the effects of market volatilities on Huafa Industrial and Northking Information 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 Northking Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and Northking Information.
Diversification Opportunities for Huafa Industrial and Northking Information
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Huafa and Northking is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and Northking Information Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northking Information 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 Northking Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northking Information has no effect on the direction of Huafa Industrial i.e., Huafa Industrial and Northking Information go up and down completely randomly.
Pair Corralation between Huafa Industrial and Northking Information
Assuming the 90 days trading horizon Huafa Industrial Co is expected to generate 0.64 times more return on investment than Northking Information. However, Huafa Industrial Co is 1.55 times less risky than Northking Information. It trades about -0.13 of its potential returns per unit of risk. Northking Information Technology is currently generating about -0.13 per unit of risk. If you would invest 702.00 in Huafa Industrial Co on August 29, 2024 and sell it today you would lose (41.00) from holding Huafa Industrial Co or give up 5.84% 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. Northking Information Technolo
Performance |
| Timeline |
| Huafa Industrial |
| Northking Information |
Huafa Industrial and Northking Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and Northking Information
The main advantage of trading using opposite Huafa Industrial and Northking Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial position performs unexpectedly, Northking Information 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 Northking Information will offset losses from the drop in Northking Information's long position.| Huafa Industrial vs. Cambricon Technologies Corp | Huafa Industrial vs. Empyrean Technology Co | Huafa Industrial vs. Kuang Chi Technologies | Huafa Industrial vs. Gansu Jiu Steel |
| Northking Information vs. China State Construction | Northking Information vs. Huafa Industrial Co | Northking Information vs. China International Capital | Northking Information vs. Kweichow Moutai 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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