Correlation Between Huafa Industrial and GreenTech Environmental
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By analyzing existing cross correlation between Huafa Industrial Co and GreenTech Environmental Co, you can compare the effects of market volatilities on Huafa Industrial and GreenTech Environmental 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 GreenTech Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and GreenTech Environmental.
Diversification Opportunities for Huafa Industrial and GreenTech Environmental
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huafa and GreenTech is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and GreenTech Environmental Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenTech Environmental 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 GreenTech Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenTech Environmental has no effect on the direction of Huafa Industrial i.e., Huafa Industrial and GreenTech Environmental go up and down completely randomly.
Pair Corralation between Huafa Industrial and GreenTech Environmental
Assuming the 90 days trading horizon Huafa Industrial Co is expected to under-perform the GreenTech Environmental. But the stock apears to be less risky and, when comparing its historical volatility, Huafa Industrial Co is 2.58 times less risky than GreenTech Environmental. The stock trades about -0.16 of its potential returns per unit of risk. The GreenTech Environmental Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,380 in GreenTech Environmental Co on August 28, 2024 and sell it today you would earn a total of 231.00 from holding GreenTech Environmental Co or generate 16.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huafa Industrial Co vs. GreenTech Environmental Co
Performance |
| Timeline |
| Huafa Industrial |
| GreenTech Environmental |
Huafa Industrial and GreenTech Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and GreenTech Environmental
The main advantage of trading using opposite Huafa Industrial and GreenTech Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial position performs unexpectedly, GreenTech Environmental 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 GreenTech Environmental will offset losses from the drop in GreenTech Environmental'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 |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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