Correlation Between Caihong Display and Humanwell Healthcare
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By analyzing existing cross correlation between Caihong Display Devices and Humanwell Healthcare Group, you can compare the effects of market volatilities on Caihong Display and Humanwell Healthcare 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 Caihong Display with a short position of Humanwell Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Humanwell Healthcare.
Diversification Opportunities for Caihong Display and Humanwell Healthcare
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Caihong and Humanwell is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Humanwell Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humanwell Healthcare and Caihong Display 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 Caihong Display Devices are associated (or correlated) with Humanwell Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humanwell Healthcare has no effect on the direction of Caihong Display i.e., Caihong Display and Humanwell Healthcare go up and down completely randomly.
Pair Corralation between Caihong Display and Humanwell Healthcare
Assuming the 90 days trading horizon Caihong Display Devices is expected to generate 1.69 times more return on investment than Humanwell Healthcare. However, Caihong Display is 1.69 times more volatile than Humanwell Healthcare Group. It trades about 0.03 of its potential returns per unit of risk. Humanwell Healthcare Group is currently generating about -0.3 per unit of risk. If you would invest 815.00 in Caihong Display Devices on October 18, 2024 and sell it today you would earn a total of 10.00 from holding Caihong Display Devices or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caihong Display Devices vs. Humanwell Healthcare Group
Performance |
| Timeline |
| Caihong Display Devices |
| Humanwell Healthcare |
Caihong Display and Humanwell Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caihong Display and Humanwell Healthcare
The main advantage of trading using opposite Caihong Display and Humanwell Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display position performs unexpectedly, Humanwell Healthcare 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 Humanwell Healthcare will offset losses from the drop in Humanwell Healthcare's long position.| Caihong Display vs. Kangping Technology Co | Caihong Display vs. Gansu Huangtai Wine marketing | Caihong Display vs. Xinxiang Chemical Fiber | Caihong Display vs. Hengli Petrochemical 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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