Correlation Between Huafa Industrial and Panda Dairy
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By analyzing existing cross correlation between Huafa Industrial Co and Panda Dairy Corp, you can compare the effects of market volatilities on Huafa Industrial and Panda Dairy 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 Panda Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and Panda Dairy.
Diversification Opportunities for Huafa Industrial and Panda Dairy
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huafa and Panda is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and Panda Dairy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panda Dairy Corp 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 Panda Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panda Dairy Corp has no effect on the direction of Huafa Industrial i.e., Huafa Industrial and Panda Dairy go up and down completely randomly.
Pair Corralation between Huafa Industrial and Panda Dairy
Assuming the 90 days trading horizon Huafa Industrial Co is expected to under-perform the Panda Dairy. But the stock apears to be less risky and, when comparing its historical volatility, Huafa Industrial Co is 3.54 times less risky than Panda Dairy. The stock trades about -0.08 of its potential returns per unit of risk. The Panda Dairy Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,350 in Panda Dairy Corp on September 12, 2024 and sell it today you would earn a total of 562.00 from holding Panda Dairy Corp or generate 23.91% 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. Panda Dairy Corp
Performance |
| Timeline |
| Huafa Industrial |
| Panda Dairy Corp |
Huafa Industrial and Panda Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and Panda Dairy
The main advantage of trading using opposite Huafa Industrial and Panda Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial position performs unexpectedly, Panda Dairy 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 Panda Dairy will offset losses from the drop in Panda Dairy'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 |
| Panda Dairy vs. China Petroleum Chemical | Panda Dairy vs. PetroChina Co Ltd | Panda Dairy vs. China State Construction | Panda Dairy 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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