Correlation Between China National and Tibet Huayu
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By analyzing existing cross correlation between China National Software and Tibet Huayu Mining, you can compare the effects of market volatilities on China National and Tibet Huayu 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 China National with a short position of Tibet Huayu. Check out your portfolio center. Please also check ongoing floating volatility patterns of China National and Tibet Huayu.
Diversification Opportunities for China National and Tibet Huayu
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Tibet is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding China National Software and Tibet Huayu Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tibet Huayu Mining and China National 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 China National Software are associated (or correlated) with Tibet Huayu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tibet Huayu Mining has no effect on the direction of China National i.e., China National and Tibet Huayu go up and down completely randomly.
Pair Corralation between China National and Tibet Huayu
Assuming the 90 days trading horizon China National Software is expected to under-perform the Tibet Huayu. In addition to that, China National is 1.5 times more volatile than Tibet Huayu Mining. It trades about -0.57 of its total potential returns per unit of risk. Tibet Huayu Mining is currently generating about -0.67 per unit of volatility. If you would invest 1,517 in Tibet Huayu Mining on October 8, 2024 and sell it today you would lose (304.00) from holding Tibet Huayu Mining or give up 20.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China National Software vs. Tibet Huayu Mining
Performance |
| Timeline |
| China National Software |
| Tibet Huayu Mining |
China National and Tibet Huayu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China National and Tibet Huayu
The main advantage of trading using opposite China National and Tibet Huayu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China National position performs unexpectedly, Tibet Huayu 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 Tibet Huayu will offset losses from the drop in Tibet Huayu's long position.| China National vs. PetroChina Co Ltd | China National vs. Gansu Jiu Steel | China National vs. Aba Chemicals Corp | China National vs. Yes Optoelectronics 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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