Correlation Between HUAQIN TECHNOLOGY and Cinda Securities
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By analyzing existing cross correlation between HUAQIN TECHNOLOGY LTD and Cinda Securities Co, you can compare the effects of market volatilities on HUAQIN TECHNOLOGY and Cinda Securities 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 HUAQIN TECHNOLOGY with a short position of Cinda Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUAQIN TECHNOLOGY and Cinda Securities.
Diversification Opportunities for HUAQIN TECHNOLOGY and Cinda Securities
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HUAQIN and Cinda is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding HUAQIN TECHNOLOGY LTD and Cinda Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinda Securities and HUAQIN TECHNOLOGY 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 HUAQIN TECHNOLOGY LTD are associated (or correlated) with Cinda Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cinda Securities has no effect on the direction of HUAQIN TECHNOLOGY i.e., HUAQIN TECHNOLOGY and Cinda Securities go up and down completely randomly.
Pair Corralation between HUAQIN TECHNOLOGY and Cinda Securities
Assuming the 90 days trading horizon HUAQIN TECHNOLOGY LTD is expected to generate 1.53 times more return on investment than Cinda Securities. However, HUAQIN TECHNOLOGY is 1.53 times more volatile than Cinda Securities Co. It trades about 0.16 of its potential returns per unit of risk. Cinda Securities Co is currently generating about -0.15 per unit of risk. If you would invest 6,385 in HUAQIN TECHNOLOGY LTD on October 10, 2024 and sell it today you would earn a total of 814.00 from holding HUAQIN TECHNOLOGY LTD or generate 12.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
HUAQIN TECHNOLOGY LTD vs. Cinda Securities Co
Performance |
| Timeline |
| HUAQIN TECHNOLOGY LTD |
| Cinda Securities |
HUAQIN TECHNOLOGY and Cinda Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUAQIN TECHNOLOGY and Cinda Securities
The main advantage of trading using opposite HUAQIN TECHNOLOGY and Cinda Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUAQIN TECHNOLOGY position performs unexpectedly, Cinda Securities 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 Cinda Securities will offset losses from the drop in Cinda Securities' long position.The idea behind HUAQIN TECHNOLOGY LTD and Cinda Securities Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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