Correlation Between Huafa Industrial and ROPEOK Technology
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By analyzing existing cross correlation between Huafa Industrial Co and ROPEOK Technology Group, you can compare the effects of market volatilities on Huafa Industrial and ROPEOK Technology 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 ROPEOK Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and ROPEOK Technology.
Diversification Opportunities for Huafa Industrial and ROPEOK Technology
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Huafa and ROPEOK is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and ROPEOK Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROPEOK Technology 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 ROPEOK Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROPEOK Technology has no effect on the direction of Huafa Industrial i.e., Huafa Industrial and ROPEOK Technology go up and down completely randomly.
Pair Corralation between Huafa Industrial and ROPEOK Technology
Assuming the 90 days trading horizon Huafa Industrial is expected to generate 3.36 times less return on investment than ROPEOK Technology. But when comparing it to its historical volatility, Huafa Industrial Co is 2.12 times less risky than ROPEOK Technology. It trades about 0.21 of its potential returns per unit of risk. ROPEOK Technology Group is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 876.00 in ROPEOK Technology Group on November 27, 2024 and sell it today you would earn a total of 132.00 from holding ROPEOK Technology Group or generate 15.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huafa Industrial Co vs. ROPEOK Technology Group
Performance |
| Timeline |
| Huafa Industrial |
| ROPEOK Technology |
Huafa Industrial and ROPEOK Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and ROPEOK Technology
The main advantage of trading using opposite Huafa Industrial and ROPEOK Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial position performs unexpectedly, ROPEOK Technology 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 ROPEOK Technology will offset losses from the drop in ROPEOK Technology's long position.| Huafa Industrial vs. China World Trade | Huafa Industrial vs. GRIPM Advanced Materials | Huafa Industrial vs. Hangzhou Minsheng Healthcare | Huafa Industrial vs. China Reform Health |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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