Correlation Between Dongxing Sec and Huafa Industrial
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By analyzing existing cross correlation between Dongxing Sec Co and Huafa Industrial Co, you can compare the effects of market volatilities on Dongxing Sec 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 Dongxing Sec with a short position of Huafa Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongxing Sec and Huafa Industrial.
Diversification Opportunities for Dongxing Sec and Huafa Industrial
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongxing and Huafa is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Dongxing Sec 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 Dongxing Sec 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 Dongxing Sec 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 Dongxing Sec i.e., Dongxing Sec and Huafa Industrial go up and down completely randomly.
Pair Corralation between Dongxing Sec and Huafa Industrial
Assuming the 90 days trading horizon Dongxing Sec Co is expected to under-perform the Huafa Industrial. In addition to that, Dongxing Sec is 1.54 times more volatile than Huafa Industrial Co. It trades about -0.11 of its total potential returns per unit of risk. Huafa Industrial Co is currently generating about -0.06 per unit of volatility. If you would invest 681.00 in Huafa Industrial Co on September 13, 2024 and sell it today you would lose (14.00) from holding Huafa Industrial Co or give up 2.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongxing Sec Co vs. Huafa Industrial Co
Performance |
| Timeline |
| Dongxing Sec |
| Huafa Industrial |
Dongxing Sec and Huafa Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongxing Sec and Huafa Industrial
The main advantage of trading using opposite Dongxing Sec and Huafa Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongxing Sec 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.| Dongxing Sec vs. Zhongtong Guomai Communication | Dongxing Sec vs. Harbin Air Conditioning | Dongxing Sec vs. Sunwave Communications Co | Dongxing Sec vs. Fiberhome Telecommunication Technologies |
| Huafa Industrial vs. China Life Insurance | Huafa Industrial vs. Cinda Securities Co | Huafa Industrial vs. Piotech Inc A | Huafa Industrial vs. Dongxing Sec Co |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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