Correlation Between Huafa Industrial and China Publishing
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By analyzing existing cross correlation between Huafa Industrial Co and China Publishing Media, you can compare the effects of market volatilities on Huafa Industrial and China Publishing 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 China Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and China Publishing.
Diversification Opportunities for Huafa Industrial and China Publishing
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Huafa and China is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and China Publishing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Publishing Media 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 China Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Publishing Media has no effect on the direction of Huafa Industrial i.e., Huafa Industrial and China Publishing go up and down completely randomly.
Pair Corralation between Huafa Industrial and China Publishing
Assuming the 90 days trading horizon Huafa Industrial Co is expected to under-perform the China Publishing. But the stock apears to be less risky and, when comparing its historical volatility, Huafa Industrial Co is 2.57 times less risky than China Publishing. The stock trades about -0.08 of its potential returns per unit of risk. The China Publishing Media is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 699.00 in China Publishing Media on August 30, 2024 and sell it today you would earn a total of 152.00 from holding China Publishing Media or generate 21.75% 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. China Publishing Media
Performance |
| Timeline |
| Huafa Industrial |
| China Publishing Media |
Huafa Industrial and China Publishing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and China Publishing
The main advantage of trading using opposite Huafa Industrial and China Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial position performs unexpectedly, China Publishing 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 China Publishing will offset losses from the drop in China Publishing's long position.| Huafa Industrial vs. Industrial and Commercial | Huafa Industrial vs. Agricultural Bank of | Huafa Industrial vs. China Construction Bank | Huafa Industrial vs. Bank of China |
| China Publishing vs. Agricultural Bank of | China Publishing vs. Industrial and Commercial | China Publishing vs. Bank of China | China Publishing vs. China Construction Bank |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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