Correlation Between China Railway and Huasi Agricultural
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By analyzing existing cross correlation between China Railway Construction and Huasi Agricultural Development, you can compare the effects of market volatilities on China Railway and Huasi Agricultural 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 Railway with a short position of Huasi Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Huasi Agricultural.
Diversification Opportunities for China Railway and Huasi Agricultural
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Huasi is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Construction and Huasi Agricultural Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huasi Agricultural and China Railway 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 Railway Construction are associated (or correlated) with Huasi Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huasi Agricultural has no effect on the direction of China Railway i.e., China Railway and Huasi Agricultural go up and down completely randomly.
Pair Corralation between China Railway and Huasi Agricultural
Assuming the 90 days trading horizon China Railway is expected to generate 4.18 times less return on investment than Huasi Agricultural. But when comparing it to its historical volatility, China Railway Construction is 1.85 times less risky than Huasi Agricultural. It trades about 0.08 of its potential returns per unit of risk. Huasi Agricultural Development is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 403.00 in Huasi Agricultural Development on November 28, 2024 and sell it today you would earn a total of 20.00 from holding Huasi Agricultural Development or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
China Railway Construction vs. Huasi Agricultural Development
Performance |
| Timeline |
| China Railway Constr |
| Huasi Agricultural |
China Railway and Huasi Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Huasi Agricultural
The main advantage of trading using opposite China Railway and Huasi Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway position performs unexpectedly, Huasi Agricultural 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 Huasi Agricultural will offset losses from the drop in Huasi Agricultural's long position.| China Railway vs. Industrial and Commercial | China Railway vs. Agricultural Bank of | China Railway vs. China Construction Bank | China Railway vs. Bank of China |
| Huasi Agricultural vs. Lander Sports Development | Huasi Agricultural vs. Sportsoul Co Ltd | Huasi Agricultural vs. China Sports Industry | Huasi Agricultural vs. Western Metal Materials |
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 Stocks Directory module to find actively traded stocks across global markets.
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