Correlation Between Huafa Industrial and Xiamen CD
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By analyzing existing cross correlation between Huafa Industrial Co and Xiamen CD, you can compare the effects of market volatilities on Huafa Industrial and Xiamen CD 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 Xiamen CD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and Xiamen CD.
Diversification Opportunities for Huafa Industrial and Xiamen CD
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Huafa and Xiamen is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and Xiamen CD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen CD 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 Xiamen CD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen CD has no effect on the direction of Huafa Industrial i.e., Huafa Industrial and Xiamen CD go up and down completely randomly.
Pair Corralation between Huafa Industrial and Xiamen CD
Assuming the 90 days trading horizon Huafa Industrial Co is expected to under-perform the Xiamen CD. But the stock apears to be less risky and, when comparing its historical volatility, Huafa Industrial Co is 1.29 times less risky than Xiamen CD. The stock trades about -0.25 of its potential returns per unit of risk. The Xiamen CD is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 1,004 in Xiamen CD on November 2, 2024 and sell it today you would lose (45.00) from holding Xiamen CD or give up 4.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huafa Industrial Co vs. Xiamen CD
Performance |
| Timeline |
| Huafa Industrial |
| Xiamen CD |
Huafa Industrial and Xiamen CD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and Xiamen CD
The main advantage of trading using opposite Huafa Industrial and Xiamen CD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial position performs unexpectedly, Xiamen CD 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 Xiamen CD will offset losses from the drop in Xiamen CD's long position.| Huafa Industrial vs. Spring Airlines Co | Huafa Industrial vs. Chengtun Mining Group | Huafa Industrial vs. Xinjiang Baodi Mining | Huafa Industrial vs. North Copper Shanxi |
| Xiamen CD vs. Shanghai Rongtai Health | Xiamen CD vs. YiDong Electronics Technology | Xiamen CD vs. Youngy Health Co | Xiamen CD vs. Everjoy Health 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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