Correlation Between Huafa Industrial and Beijing Shanghai
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By analyzing existing cross correlation between Huafa Industrial Co and Beijing Shanghai High Speed, you can compare the effects of market volatilities on Huafa Industrial and Beijing Shanghai 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 Beijing Shanghai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and Beijing Shanghai.
Diversification Opportunities for Huafa Industrial and Beijing Shanghai
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Huafa and Beijing is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and Beijing Shanghai High Speed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Shanghai High 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 Beijing Shanghai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Shanghai High has no effect on the direction of Huafa Industrial i.e., Huafa Industrial and Beijing Shanghai go up and down completely randomly.
Pair Corralation between Huafa Industrial and Beijing Shanghai
Assuming the 90 days trading horizon Huafa Industrial Co is expected to under-perform the Beijing Shanghai. In addition to that, Huafa Industrial is 1.92 times more volatile than Beijing Shanghai High Speed. It trades about -0.02 of its total potential returns per unit of risk. Beijing Shanghai High Speed is currently generating about 0.02 per unit of volatility. If you would invest 515.00 in Beijing Shanghai High Speed on August 26, 2024 and sell it today you would earn a total of 38.00 from holding Beijing Shanghai High Speed or generate 7.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huafa Industrial Co vs. Beijing Shanghai High Speed
Performance |
| Timeline |
| Huafa Industrial |
| Beijing Shanghai High |
Huafa Industrial and Beijing Shanghai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and Beijing Shanghai
The main advantage of trading using opposite Huafa Industrial and Beijing Shanghai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial position performs unexpectedly, Beijing Shanghai 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 Beijing Shanghai will offset losses from the drop in Beijing Shanghai'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 |
| Beijing Shanghai vs. CSSC Offshore Marine | Beijing Shanghai vs. Jonjee Hi tech Industrial | Beijing Shanghai vs. ChengDu Hi Tech Development | Beijing Shanghai vs. Suzhou Mingzhi Technology |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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