Correlation Between Huafa Industrial and Gan Yuan
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By analyzing existing cross correlation between Huafa Industrial Co and Gan Yuan Foods, you can compare the effects of market volatilities on Huafa Industrial and Gan Yuan 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 Gan Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and Gan Yuan.
Diversification Opportunities for Huafa Industrial and Gan Yuan
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huafa and Gan is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and Gan Yuan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gan Yuan Foods 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 Gan Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gan Yuan Foods has no effect on the direction of Huafa Industrial i.e., Huafa Industrial and Gan Yuan go up and down completely randomly.
Pair Corralation between Huafa Industrial and Gan Yuan
Assuming the 90 days trading horizon Huafa Industrial Co is expected to under-perform the Gan Yuan. In addition to that, Huafa Industrial is 1.07 times more volatile than Gan Yuan Foods. It trades about -0.01 of its total potential returns per unit of risk. Gan Yuan Foods is currently generating about 0.03 per unit of volatility. If you would invest 6,515 in Gan Yuan Foods on September 12, 2024 and sell it today you would earn a total of 1,318 from holding Gan Yuan Foods or generate 20.23% 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. Gan Yuan Foods
Performance |
| Timeline |
| Huafa Industrial |
| Gan Yuan Foods |
Huafa Industrial and Gan Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and Gan Yuan
The main advantage of trading using opposite Huafa Industrial and Gan Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial position performs unexpectedly, Gan Yuan 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 Gan Yuan will offset losses from the drop in Gan Yuan'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 |
| Gan Yuan vs. Maxvision Technology Corp | Gan Yuan vs. Eastroc Beverage Group | Gan Yuan vs. Changchun Faway Automobile | Gan Yuan vs. ROPEOK Technology 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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