Correlation Between Long Yuan and Hua Xia
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By analyzing existing cross correlation between Long Yuan Construction and Hua Xia Bank, you can compare the effects of market volatilities on Long Yuan and Hua Xia 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 Long Yuan with a short position of Hua Xia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long Yuan and Hua Xia.
Diversification Opportunities for Long Yuan and Hua Xia
Poor diversification
The 3 months correlation between Long and Hua is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Long Yuan Construction and Hua Xia Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Xia Bank and Long Yuan 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 Long Yuan Construction are associated (or correlated) with Hua Xia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Xia Bank has no effect on the direction of Long Yuan i.e., Long Yuan and Hua Xia go up and down completely randomly.
Pair Corralation between Long Yuan and Hua Xia
Assuming the 90 days trading horizon Long Yuan Construction is expected to under-perform the Hua Xia. In addition to that, Long Yuan is 1.89 times more volatile than Hua Xia Bank. It trades about -0.02 of its total potential returns per unit of risk. Hua Xia Bank is currently generating about 0.17 per unit of volatility. If you would invest 715.00 in Hua Xia Bank on September 3, 2024 and sell it today you would earn a total of 42.00 from holding Hua Xia Bank or generate 5.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Long Yuan Construction vs. Hua Xia Bank
Performance |
| Timeline |
| Long Yuan Construction |
| Hua Xia Bank |
Long Yuan and Hua Xia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long Yuan and Hua Xia
The main advantage of trading using opposite Long Yuan and Hua Xia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long Yuan position performs unexpectedly, Hua Xia 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 Hua Xia will offset losses from the drop in Hua Xia's long position.| Long Yuan vs. Cultural Investment Holdings | Long Yuan vs. Gome Telecom Equipment | Long Yuan vs. Bus Online Co | Long Yuan vs. Holitech Technology Co |
| Hua Xia vs. Western Metal Materials | Hua Xia vs. Bomesc Offshore Engineering | Hua Xia vs. Ningxia Building Materials | Hua Xia vs. Dymatic Chemicals |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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