Correlation Between Bonree Data and Huafa Industrial
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By analyzing existing cross correlation between Bonree Data Technology and Huafa Industrial Co, you can compare the effects of market volatilities on Bonree Data 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 Bonree Data with a short position of Huafa Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bonree Data and Huafa Industrial.
Diversification Opportunities for Bonree Data and Huafa Industrial
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bonree and Huafa is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bonree Data Technology and Huafa Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huafa Industrial and Bonree Data 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 Bonree Data Technology 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 Bonree Data i.e., Bonree Data and Huafa Industrial go up and down completely randomly.
Pair Corralation between Bonree Data and Huafa Industrial
Assuming the 90 days trading horizon Bonree Data Technology is expected to generate 1.82 times more return on investment than Huafa Industrial. However, Bonree Data is 1.82 times more volatile than Huafa Industrial Co. It trades about 0.01 of its potential returns per unit of risk. Huafa Industrial Co is currently generating about -0.04 per unit of risk. If you would invest 4,845 in Bonree Data Technology on November 7, 2024 and sell it today you would lose (925.00) from holding Bonree Data Technology or give up 19.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bonree Data Technology vs. Huafa Industrial Co
Performance |
| Timeline |
| Bonree Data Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Huafa Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bonree Data and Huafa Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bonree Data and Huafa Industrial
The main advantage of trading using opposite Bonree Data and Huafa Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bonree Data 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.The idea behind Bonree Data Technology and Huafa Industrial 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.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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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