Correlation Between Datang HuaYin and Fuyao Glass
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By analyzing existing cross correlation between Datang HuaYin Electric and Fuyao Glass Industry, you can compare the effects of market volatilities on Datang HuaYin and Fuyao Glass 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 Datang HuaYin with a short position of Fuyao Glass. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang HuaYin and Fuyao Glass.
Diversification Opportunities for Datang HuaYin and Fuyao Glass
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Datang and Fuyao is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Datang HuaYin Electric and Fuyao Glass Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuyao Glass Industry and Datang HuaYin 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 Datang HuaYin Electric are associated (or correlated) with Fuyao Glass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuyao Glass Industry has no effect on the direction of Datang HuaYin i.e., Datang HuaYin and Fuyao Glass go up and down completely randomly.
Pair Corralation between Datang HuaYin and Fuyao Glass
Assuming the 90 days trading horizon Datang HuaYin Electric is expected to generate 2.03 times more return on investment than Fuyao Glass. However, Datang HuaYin is 2.03 times more volatile than Fuyao Glass Industry. It trades about 0.02 of its potential returns per unit of risk. Fuyao Glass Industry is currently generating about -0.19 per unit of risk. If you would invest 347.00 in Datang HuaYin Electric on August 27, 2024 and sell it today you would earn a total of 2.00 from holding Datang HuaYin Electric or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Datang HuaYin Electric vs. Fuyao Glass Industry
Performance |
| Timeline |
| Datang HuaYin Electric |
| Fuyao Glass Industry |
Datang HuaYin and Fuyao Glass Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang HuaYin and Fuyao Glass
The main advantage of trading using opposite Datang HuaYin and Fuyao Glass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang HuaYin position performs unexpectedly, Fuyao Glass 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 Fuyao Glass will offset losses from the drop in Fuyao Glass' long position.| Datang HuaYin vs. Industrial and Commercial | Datang HuaYin vs. China Construction Bank | Datang HuaYin vs. Agricultural Bank of | Datang HuaYin vs. Bank of China |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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