Correlation Between Industrial and Hua Xia
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By analyzing existing cross correlation between Industrial and Commercial and Hua Xia Bank, you can compare the effects of market volatilities on Industrial and Hua Xia 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 Industrial with a short position of Hua Xia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Hua Xia.
Diversification Opportunities for Industrial and Hua Xia
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Industrial and Hua is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and Hua Xia Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Xia Bank and Industrial 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 Industrial and Commercial are associated (or correlated) with Hua Xia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Xia Bank has no effect on the direction of Industrial i.e., Industrial and Hua Xia go up and down completely randomly.
Pair Corralation between Industrial and Hua Xia
Assuming the 90 days trading horizon Industrial is expected to generate 1.59 times less return on investment than Hua Xia. But when comparing it to its historical volatility, Industrial and Commercial is 1.67 times less risky than Hua Xia. It trades about 0.07 of its potential returns per unit of risk. Hua Xia Bank is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 709.00 in Hua Xia Bank on August 29, 2024 and sell it today you would earn a total of 16.00 from holding Hua Xia Bank or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. Hua Xia Bank
Performance |
| Timeline |
| Industrial and Commercial |
| Hua Xia Bank |
Industrial and Hua Xia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and Hua Xia
The main advantage of trading using opposite Industrial and Hua Xia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, Hua Xia 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 Hua Xia will offset losses from the drop in Hua Xia's long position.| Industrial vs. Allwin Telecommunication Co | Industrial vs. SUNSEA Telecommunications Co | Industrial vs. Guangzhou Haige Communications | Industrial vs. Nanjing Putian Telecommunications |
| Hua Xia vs. Liuzhou Chemical Industry | Hua Xia vs. HeBei Jinniu Chemical | Hua Xia vs. New Hope Dairy | Hua Xia vs. Eastroc Beverage Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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