Correlation Between Huafa Industrial and Suzhou Weizhixiang
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By analyzing existing cross correlation between Huafa Industrial Co and Suzhou Weizhixiang Food, you can compare the effects of market volatilities on Huafa Industrial and Suzhou Weizhixiang 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 Suzhou Weizhixiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and Suzhou Weizhixiang.
Diversification Opportunities for Huafa Industrial and Suzhou Weizhixiang
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Huafa and Suzhou is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and Suzhou Weizhixiang Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou Weizhixiang Food 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 Suzhou Weizhixiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou Weizhixiang Food has no effect on the direction of Huafa Industrial i.e., Huafa Industrial and Suzhou Weizhixiang go up and down completely randomly.
Pair Corralation between Huafa Industrial and Suzhou Weizhixiang
Assuming the 90 days trading horizon Huafa Industrial Co is expected to under-perform the Suzhou Weizhixiang. But the stock apears to be less risky and, when comparing its historical volatility, Huafa Industrial Co is 2.14 times less risky than Suzhou Weizhixiang. The stock trades about -0.01 of its potential returns per unit of risk. The Suzhou Weizhixiang Food is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,110 in Suzhou Weizhixiang Food on September 5, 2024 and sell it today you would earn a total of 508.00 from holding Suzhou Weizhixiang Food or generate 24.08% 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. Suzhou Weizhixiang Food
Performance |
| Timeline |
| Huafa Industrial |
| Suzhou Weizhixiang Food |
Huafa Industrial and Suzhou Weizhixiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and Suzhou Weizhixiang
The main advantage of trading using opposite Huafa Industrial and Suzhou Weizhixiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial position performs unexpectedly, Suzhou Weizhixiang 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 Suzhou Weizhixiang will offset losses from the drop in Suzhou Weizhixiang's long position.| Huafa Industrial vs. Panda Financial Holding | Huafa Industrial vs. Unisplendour Corp | Huafa Industrial vs. Xiamen Bank Co | Huafa Industrial vs. Guangdong Shenglu Telecommunication |
| Suzhou Weizhixiang vs. Poly Real Estate | Suzhou Weizhixiang vs. China Vanke Co | Suzhou Weizhixiang vs. China Merchants Shekou | Suzhou Weizhixiang vs. Huafa Industrial Co |
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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