Correlation Between Huafa Industrial and Marssenger Kitchenware
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By analyzing existing cross correlation between Huafa Industrial Co and Marssenger Kitchenware Co, you can compare the effects of market volatilities on Huafa Industrial and Marssenger Kitchenware 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 Marssenger Kitchenware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and Marssenger Kitchenware.
Diversification Opportunities for Huafa Industrial and Marssenger Kitchenware
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Huafa and Marssenger is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and Marssenger Kitchenware Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marssenger Kitchenware 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 Marssenger Kitchenware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marssenger Kitchenware has no effect on the direction of Huafa Industrial i.e., Huafa Industrial and Marssenger Kitchenware go up and down completely randomly.
Pair Corralation between Huafa Industrial and Marssenger Kitchenware
Assuming the 90 days trading horizon Huafa Industrial is expected to generate 1.83 times less return on investment than Marssenger Kitchenware. But when comparing it to its historical volatility, Huafa Industrial Co is 1.49 times less risky than Marssenger Kitchenware. It trades about 0.12 of its potential returns per unit of risk. Marssenger Kitchenware Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,093 in Marssenger Kitchenware Co on September 2, 2024 and sell it today you would earn a total of 450.00 from holding Marssenger Kitchenware Co or generate 41.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huafa Industrial Co vs. Marssenger Kitchenware Co
Performance |
| Timeline |
| Huafa Industrial |
| Marssenger Kitchenware |
Huafa Industrial and Marssenger Kitchenware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and Marssenger Kitchenware
The main advantage of trading using opposite Huafa Industrial and Marssenger Kitchenware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial position performs unexpectedly, Marssenger Kitchenware 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 Marssenger Kitchenware will offset losses from the drop in Marssenger Kitchenware'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 |
| Marssenger Kitchenware vs. Kweichow Moutai Co | Marssenger Kitchenware vs. NAURA Technology Group | Marssenger Kitchenware vs. Zhejiang Orient Gene | Marssenger Kitchenware vs. APT Medical |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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