Correlation Between Panda Financial and Huafa Industrial
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By analyzing existing cross correlation between Panda Financial Holding and Huafa Industrial Co, you can compare the effects of market volatilities on Panda Financial and Huafa Industrial 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 Panda Financial with a short position of Huafa Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panda Financial and Huafa Industrial.
Diversification Opportunities for Panda Financial and Huafa Industrial
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Panda and Huafa is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Panda Financial Holding and Huafa Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huafa Industrial and Panda Financial 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 Panda Financial Holding are associated (or correlated) with Huafa Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huafa Industrial has no effect on the direction of Panda Financial i.e., Panda Financial and Huafa Industrial go up and down completely randomly.
Pair Corralation between Panda Financial and Huafa Industrial
Assuming the 90 days trading horizon Panda Financial Holding is expected to generate 1.62 times more return on investment than Huafa Industrial. However, Panda Financial is 1.62 times more volatile than Huafa Industrial Co. It trades about 0.33 of its potential returns per unit of risk. Huafa Industrial Co is currently generating about -0.06 per unit of risk. If you would invest 1,211 in Panda Financial Holding on September 5, 2024 and sell it today you would earn a total of 295.00 from holding Panda Financial Holding or generate 24.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Panda Financial Holding vs. Huafa Industrial Co
Performance |
| Timeline |
| Panda Financial Holding |
| Huafa Industrial |
Panda Financial and Huafa Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panda Financial and Huafa Industrial
The main advantage of trading using opposite Panda Financial and Huafa Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panda Financial position performs unexpectedly, Huafa Industrial 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 Huafa Industrial will offset losses from the drop in Huafa Industrial's long position.| Panda Financial vs. Guangzhou Automobile Group | Panda Financial vs. Zijin Mining Group | Panda Financial vs. Xiangyang Automobile Bearing | Panda Financial vs. Pengxin International Mining |
| Huafa Industrial vs. Panda Financial Holding | Huafa Industrial vs. Unisplendour Corp | Huafa Industrial vs. Xiamen Bank Co | Huafa Industrial vs. Guangdong Shenglu Telecommunication |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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