Correlation Between Caihong Display and Harbin Hatou
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By analyzing existing cross correlation between Caihong Display Devices and Harbin Hatou Investment, you can compare the effects of market volatilities on Caihong Display and Harbin Hatou 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 Harbin Hatou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Harbin Hatou.
Diversification Opportunities for Caihong Display and Harbin Hatou
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Caihong and Harbin is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Harbin Hatou Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbin Hatou Investment 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 Harbin Hatou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbin Hatou Investment has no effect on the direction of Caihong Display i.e., Caihong Display and Harbin Hatou go up and down completely randomly.
Pair Corralation between Caihong Display and Harbin Hatou
Assuming the 90 days trading horizon Caihong Display Devices is expected to under-perform the Harbin Hatou. But the stock apears to be less risky and, when comparing its historical volatility, Caihong Display Devices is 1.51 times less risky than Harbin Hatou. The stock trades about -0.05 of its potential returns per unit of risk. The Harbin Hatou Investment is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 742.00 in Harbin Hatou Investment on September 12, 2024 and sell it today you would lose (5.00) from holding Harbin Hatou Investment or give up 0.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Caihong Display Devices vs. Harbin Hatou Investment
Performance |
| Timeline |
| Caihong Display Devices |
| Harbin Hatou Investment |
Caihong Display and Harbin Hatou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caihong Display and Harbin Hatou
The main advantage of trading using opposite Caihong Display and Harbin Hatou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display position performs unexpectedly, Harbin Hatou 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 Harbin Hatou will offset losses from the drop in Harbin Hatou's long position.| Caihong Display vs. Gansu Jiu Steel | Caihong Display vs. Shandong Mining Machinery | Caihong Display vs. Aba Chemicals Corp | Caihong Display vs. BlueFocus Communication Group |
| Harbin Hatou vs. Nuode Investment Co | Harbin Hatou vs. Xinjiang Communications Construction | Harbin Hatou vs. Vanfund Urban Investment | Harbin Hatou vs. Jiangsu Yueda Investment |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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