Correlation Between Xiamen Bank and Huafa Industrial
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By analyzing existing cross correlation between Xiamen Bank Co and Huafa Industrial Co, you can compare the effects of market volatilities on Xiamen Bank 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 Xiamen Bank with a short position of Huafa Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Bank and Huafa Industrial.
Diversification Opportunities for Xiamen Bank and Huafa Industrial
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xiamen and Huafa is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Bank Co and Huafa Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huafa Industrial and Xiamen Bank 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 Xiamen Bank Co 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 Xiamen Bank i.e., Xiamen Bank and Huafa Industrial go up and down completely randomly.
Pair Corralation between Xiamen Bank and Huafa Industrial
Assuming the 90 days trading horizon Xiamen Bank Co is expected to generate 1.04 times more return on investment than Huafa Industrial. However, Xiamen Bank is 1.04 times more volatile than Huafa Industrial Co. It trades about 0.2 of its potential returns per unit of risk. Huafa Industrial Co is currently generating about -0.06 per unit of risk. If you would invest 529.00 in Xiamen Bank Co on September 5, 2024 and sell it today you would earn a total of 47.00 from holding Xiamen Bank Co or generate 8.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiamen Bank Co vs. Huafa Industrial Co
Performance |
| Timeline |
| Xiamen Bank |
| Huafa Industrial |
Xiamen Bank and Huafa Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiamen Bank and Huafa Industrial
The main advantage of trading using opposite Xiamen Bank and Huafa Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen Bank 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.| Xiamen Bank vs. Jiangsu Jinling Sports | Xiamen Bank vs. Everdisplay Optronics Shanghai | Xiamen Bank vs. Chengdu Spaceon Electronics | Xiamen Bank vs. CICC Fund Management |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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