Correlation Between Jiangsu Financial and Huafa Industrial
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By analyzing existing cross correlation between Jiangsu Financial Leasing and Huafa Industrial Co, you can compare the effects of market volatilities on Jiangsu Financial and Huafa Industrial 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 Jiangsu Financial with a short position of Huafa Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Financial and Huafa Industrial.
Diversification Opportunities for Jiangsu Financial and Huafa Industrial
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jiangsu and Huafa is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Financial Leasing and Huafa Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huafa Industrial and Jiangsu Financial 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 Jiangsu Financial Leasing are associated (or correlated) with Huafa Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huafa Industrial has no effect on the direction of Jiangsu Financial i.e., Jiangsu Financial and Huafa Industrial go up and down completely randomly.
Pair Corralation between Jiangsu Financial and Huafa Industrial
Assuming the 90 days trading horizon Jiangsu Financial Leasing is expected to generate 0.66 times more return on investment than Huafa Industrial. However, Jiangsu Financial Leasing is 1.52 times less risky than Huafa Industrial. It trades about 0.01 of its potential returns per unit of risk. Huafa Industrial Co is currently generating about 0.01 per unit of risk. If you would invest 507.00 in Jiangsu Financial Leasing on September 5, 2024 and sell it today you would earn a total of 8.00 from holding Jiangsu Financial Leasing or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Financial Leasing vs. Huafa Industrial Co
Performance |
| Timeline |
| Jiangsu Financial Leasing |
| Huafa Industrial |
Jiangsu Financial and Huafa Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Financial and Huafa Industrial
The main advantage of trading using opposite Jiangsu Financial and Huafa Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Financial position performs unexpectedly, Huafa Industrial 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 Huafa Industrial will offset losses from the drop in Huafa Industrial's long position.| Jiangsu Financial vs. China Petroleum Chemical | Jiangsu Financial vs. PetroChina Co Ltd | Jiangsu Financial vs. China State Construction | Jiangsu Financial vs. China Railway Group |
| Huafa Industrial vs. Panda Financial Holding | Huafa Industrial vs. Unisplendour Corp | Huafa Industrial vs. Xiamen Bank Co | Huafa Industrial vs. Guangdong Shenglu Telecommunication |
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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