Correlation Between Huafa Industrial and Qumei Furniture
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By analyzing existing cross correlation between Huafa Industrial Co and Qumei Furniture Group, you can compare the effects of market volatilities on Huafa Industrial and Qumei Furniture 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 Qumei Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and Qumei Furniture.
Diversification Opportunities for Huafa Industrial and Qumei Furniture
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huafa and Qumei is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and Qumei Furniture Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qumei Furniture Group 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 Qumei Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qumei Furniture Group has no effect on the direction of Huafa Industrial i.e., Huafa Industrial and Qumei Furniture go up and down completely randomly.
Pair Corralation between Huafa Industrial and Qumei Furniture
Assuming the 90 days trading horizon Huafa Industrial Co is expected to generate 0.81 times more return on investment than Qumei Furniture. However, Huafa Industrial Co is 1.24 times less risky than Qumei Furniture. It trades about 0.0 of its potential returns per unit of risk. Qumei Furniture Group is currently generating about -0.05 per unit of risk. If you would invest 743.00 in Huafa Industrial Co on September 2, 2024 and sell it today you would lose (71.00) from holding Huafa Industrial Co or give up 9.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huafa Industrial Co vs. Qumei Furniture Group
Performance |
| Timeline |
| Huafa Industrial |
| Qumei Furniture Group |
Huafa Industrial and Qumei Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and Qumei Furniture
The main advantage of trading using opposite Huafa Industrial and Qumei Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial position performs unexpectedly, Qumei Furniture 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 Qumei Furniture will offset losses from the drop in Qumei Furniture'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 |
| Qumei Furniture vs. Great Sun Foods Co | Qumei Furniture vs. Xiwang Foodstuffs Co | Qumei Furniture vs. Sichuan Teway Food | Qumei Furniture vs. Ligao Foods CoLtd |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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