Correlation Between Cultural Investment and Hunan Investment
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By analyzing existing cross correlation between Cultural Investment Holdings and Hunan Investment Group, you can compare the effects of market volatilities on Cultural Investment and Hunan Investment 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 Cultural Investment with a short position of Hunan Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cultural Investment and Hunan Investment.
Diversification Opportunities for Cultural Investment and Hunan Investment
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cultural and Hunan is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Cultural Investment Holdings and Hunan Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Investment and Cultural Investment 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 Cultural Investment Holdings are associated (or correlated) with Hunan Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Investment has no effect on the direction of Cultural Investment i.e., Cultural Investment and Hunan Investment go up and down completely randomly.
Pair Corralation between Cultural Investment and Hunan Investment
Assuming the 90 days trading horizon Cultural Investment Holdings is expected to under-perform the Hunan Investment. But the stock apears to be less risky and, when comparing its historical volatility, Cultural Investment Holdings is 1.09 times less risky than Hunan Investment. The stock trades about -0.13 of its potential returns per unit of risk. The Hunan Investment Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 513.00 in Hunan Investment Group on November 3, 2024 and sell it today you would earn a total of 12.00 from holding Hunan Investment Group or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cultural Investment Holdings vs. Hunan Investment Group
Performance |
| Timeline |
| Cultural Investment |
| Hunan Investment |
Cultural Investment and Hunan Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cultural Investment and Hunan Investment
The main advantage of trading using opposite Cultural Investment and Hunan Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cultural Investment position performs unexpectedly, Hunan Investment 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 Hunan Investment will offset losses from the drop in Hunan Investment's long position.The idea behind Cultural Investment Holdings and Hunan Investment Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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