Correlation Between Huaxia Eye and China Longyuan
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By analyzing existing cross correlation between Huaxia Eye Hospital and China Longyuan Power, you can compare the effects of market volatilities on Huaxia Eye and China Longyuan 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 Huaxia Eye with a short position of China Longyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huaxia Eye and China Longyuan.
Diversification Opportunities for Huaxia Eye and China Longyuan
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Huaxia and China is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Huaxia Eye Hospital and China Longyuan Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Longyuan Power and Huaxia Eye 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 Huaxia Eye Hospital are associated (or correlated) with China Longyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Longyuan Power has no effect on the direction of Huaxia Eye i.e., Huaxia Eye and China Longyuan go up and down completely randomly.
Pair Corralation between Huaxia Eye and China Longyuan
Assuming the 90 days trading horizon Huaxia Eye Hospital is expected to under-perform the China Longyuan. In addition to that, Huaxia Eye is 1.51 times more volatile than China Longyuan Power. It trades about -0.04 of its total potential returns per unit of risk. China Longyuan Power is currently generating about -0.06 per unit of volatility. If you would invest 1,711 in China Longyuan Power on September 25, 2024 and sell it today you would lose (32.00) from holding China Longyuan Power or give up 1.87% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
Huaxia Eye Hospital vs. China Longyuan Power
Performance |
Timeline |
Huaxia Eye Hospital |
China Longyuan Power |
Huaxia Eye and China Longyuan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Huaxia Eye and China Longyuan
The main advantage of trading using opposite Huaxia Eye and China Longyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huaxia Eye position performs unexpectedly, China Longyuan 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 China Longyuan will offset losses from the drop in China Longyuan's long position.Huaxia Eye vs. China Longyuan Power | Huaxia Eye vs. PetroChina Co Ltd | Huaxia Eye vs. Bank of China | Huaxia Eye vs. Guangxi Guiguan Electric |
China Longyuan vs. Industrial and Commercial | China Longyuan vs. Agricultural Bank of | China Longyuan vs. China Construction Bank | China Longyuan vs. Bank of China |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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