Correlation Between Guoguang Electric and Huafa Industrial
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By analyzing existing cross correlation between Guoguang Electric Co and Huafa Industrial Co, you can compare the effects of market volatilities on Guoguang Electric 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 Guoguang Electric with a short position of Huafa Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guoguang Electric and Huafa Industrial.
Diversification Opportunities for Guoguang Electric and Huafa Industrial
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guoguang and Huafa is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Guoguang Electric Co and Huafa Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huafa Industrial and Guoguang Electric 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 Guoguang Electric Co 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 Guoguang Electric i.e., Guoguang Electric and Huafa Industrial go up and down completely randomly.
Pair Corralation between Guoguang Electric and Huafa Industrial
Assuming the 90 days trading horizon Guoguang Electric Co is expected to generate 1.61 times more return on investment than Huafa Industrial. However, Guoguang Electric is 1.61 times more volatile than Huafa Industrial Co. It trades about 0.0 of its potential returns per unit of risk. Huafa Industrial Co is currently generating about -0.02 per unit of risk. If you would invest 7,908 in Guoguang Electric Co on September 12, 2024 and sell it today you would lose (1,856) from holding Guoguang Electric Co or give up 23.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.71% |
| Values | Daily Returns |
Guoguang Electric Co vs. Huafa Industrial Co
Performance |
| Timeline |
| Guoguang Electric |
| Huafa Industrial |
Guoguang Electric and Huafa Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guoguang Electric and Huafa Industrial
The main advantage of trading using opposite Guoguang Electric and Huafa Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guoguang Electric 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.| Guoguang Electric vs. Huafa Industrial Co | Guoguang Electric vs. By health | Guoguang Electric vs. Tibet Huayu Mining | Guoguang Electric vs. Hainan Mining Co |
| Huafa Industrial vs. Industrial and Commercial | Huafa Industrial vs. China Construction Bank | Huafa Industrial vs. Bank of China | Huafa Industrial vs. Agricultural Bank of |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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