Correlation Between Cultural Investment and Datang HuaYin
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By analyzing existing cross correlation between Cultural Investment Holdings and Datang HuaYin Electric, you can compare the effects of market volatilities on Cultural Investment and Datang HuaYin 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 Datang HuaYin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cultural Investment and Datang HuaYin.
Diversification Opportunities for Cultural Investment and Datang HuaYin
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cultural and Datang is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cultural Investment Holdings and Datang HuaYin Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datang HuaYin Electric 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 Datang HuaYin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datang HuaYin Electric has no effect on the direction of Cultural Investment i.e., Cultural Investment and Datang HuaYin go up and down completely randomly.
Pair Corralation between Cultural Investment and Datang HuaYin
Assuming the 90 days trading horizon Cultural Investment Holdings is expected to generate 1.49 times more return on investment than Datang HuaYin. However, Cultural Investment is 1.49 times more volatile than Datang HuaYin Electric. It trades about 0.03 of its potential returns per unit of risk. Datang HuaYin Electric is currently generating about 0.02 per unit of risk. If you would invest 223.00 in Cultural Investment Holdings on September 14, 2024 and sell it today you would earn a total of 22.00 from holding Cultural Investment Holdings or generate 9.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cultural Investment Holdings vs. Datang HuaYin Electric
Performance |
| Timeline |
| Cultural Investment |
| Datang HuaYin Electric |
Cultural Investment and Datang HuaYin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cultural Investment and Datang HuaYin
The main advantage of trading using opposite Cultural Investment and Datang HuaYin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cultural Investment position performs unexpectedly, Datang HuaYin 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 Datang HuaYin will offset losses from the drop in Datang HuaYin's long position.| Cultural Investment vs. Industrial and Commercial | Cultural Investment vs. China Construction Bank | Cultural Investment vs. Agricultural Bank of | Cultural Investment vs. Bank of China |
| Datang HuaYin vs. Industrial and Commercial | Datang HuaYin vs. China Construction Bank | Datang HuaYin vs. Agricultural Bank of | Datang HuaYin vs. Bank of China |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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