Correlation Between Harvest Fund and Heilongjiang Transport

Can any of the company-specific risk be diversified away by investing in both Harvest Fund and Heilongjiang Transport at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Harvest Fund and Heilongjiang Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Harvest Fund Management and Heilongjiang Transport Development, you can compare the effects of market volatilities on Harvest Fund and Heilongjiang Transport 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 Harvest Fund with a short position of Heilongjiang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvest Fund and Heilongjiang Transport.

Diversification Opportunities for Harvest Fund and Heilongjiang Transport

0.2

Correlation Coefficient

Harvest Fund  Heilongjiang Transport

Modest diversification

The 3 months correlation between Harvest and Heilongjiang is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Fund Management and Heilongjiang Transport Develop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heilongjiang Transport and Harvest Fund 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 Harvest Fund Management are associated (or correlated) with Heilongjiang Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heilongjiang Transport has no effect on the direction of Harvest Fund i.e., Harvest Fund and Heilongjiang Transport go up and down completely randomly.

Pair Corralation between Harvest Fund and Heilongjiang Transport

Assuming the 90 days trading horizon Harvest Fund is expected to generate 12.82 times less return on investment than Heilongjiang Transport. But when comparing it to its historical volatility, Harvest Fund Management is 5.29 times less risky than Heilongjiang Transport. It trades about 0.03 of its potential returns per unit of risk. Heilongjiang Transport Development is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  301.00  in Heilongjiang Transport Development on September 29, 2024 and sell it today you would earn a total of  67.00  from holding Heilongjiang Transport Development or generate 22.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Harvest Fund Management  vs.  Heilongjiang Transport Develop

Harvest Fund Management

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Harvest Fund Management are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Harvest Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Heilongjiang Transport

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Heilongjiang Transport Development are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Heilongjiang Transport is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Harvest Fund and Heilongjiang Transport

The main advantage of trading using opposite Harvest Fund and Heilongjiang Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harvest Fund position performs unexpectedly, Heilongjiang Transport 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 Heilongjiang Transport will offset losses from the drop in Heilongjiang Transport's long position.

The idea behind Harvest Fund Management and Heilongjiang Transport Development 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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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.