Correlation Between China State and Hangzhou Huawang
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By analyzing existing cross correlation between China State Construction and Hangzhou Huawang New, you can compare the effects of market volatilities on China State and Hangzhou Huawang 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 China State with a short position of Hangzhou Huawang. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Hangzhou Huawang.
Diversification Opportunities for China State and Hangzhou Huawang
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Hangzhou is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Hangzhou Huawang New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Huawang New and China State 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 China State Construction are associated (or correlated) with Hangzhou Huawang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Huawang New has no effect on the direction of China State i.e., China State and Hangzhou Huawang go up and down completely randomly.
Pair Corralation between China State and Hangzhou Huawang
Assuming the 90 days trading horizon China State Construction is expected to generate 1.18 times more return on investment than Hangzhou Huawang. However, China State is 1.18 times more volatile than Hangzhou Huawang New. It trades about -0.02 of its potential returns per unit of risk. Hangzhou Huawang New is currently generating about -0.09 per unit of risk. If you would invest 618.00 in China State Construction on August 29, 2024 and sell it today you would lose (26.00) from holding China State Construction or give up 4.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. Hangzhou Huawang New
Performance |
| Timeline |
| China State Construction |
| Hangzhou Huawang New |
China State and Hangzhou Huawang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Hangzhou Huawang
The main advantage of trading using opposite China State and Hangzhou Huawang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Hangzhou Huawang 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 Hangzhou Huawang will offset losses from the drop in Hangzhou Huawang's long position.| China State vs. Shenyang Chemical Industry | China State vs. Lianhe Chemical Technology | China State vs. North Huajin Chemical | China State vs. Maoming Petro Chemical Shihua |
| Hangzhou Huawang vs. Qinghaihuading Industrial Co | Hangzhou Huawang vs. Hengli Industrial Development | Hangzhou Huawang vs. Gem Year Industrial Co | Hangzhou Huawang vs. Guangdong Jingyi Metal |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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