Correlation Between Huasi Agricultural and Lushang Property
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By analyzing existing cross correlation between Huasi Agricultural Development and Lushang Property Co, you can compare the effects of market volatilities on Huasi Agricultural and Lushang Property 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 Huasi Agricultural with a short position of Lushang Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huasi Agricultural and Lushang Property.
Diversification Opportunities for Huasi Agricultural and Lushang Property
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Huasi and Lushang is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Huasi Agricultural Development and Lushang Property Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lushang Property and Huasi Agricultural 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 Huasi Agricultural Development are associated (or correlated) with Lushang Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lushang Property has no effect on the direction of Huasi Agricultural i.e., Huasi Agricultural and Lushang Property go up and down completely randomly.
Pair Corralation between Huasi Agricultural and Lushang Property
Assuming the 90 days trading horizon Huasi Agricultural Development is expected to generate 1.05 times more return on investment than Lushang Property. However, Huasi Agricultural is 1.05 times more volatile than Lushang Property Co. It trades about 0.24 of its potential returns per unit of risk. Lushang Property Co is currently generating about 0.09 per unit of risk. If you would invest 299.00 in Huasi Agricultural Development on September 5, 2024 and sell it today you would earn a total of 135.00 from holding Huasi Agricultural Development or generate 45.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Huasi Agricultural Development vs. Lushang Property Co
Performance |
Timeline |
Huasi Agricultural |
Lushang Property |
Huasi Agricultural and Lushang Property Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Huasi Agricultural and Lushang Property
The main advantage of trading using opposite Huasi Agricultural and Lushang Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huasi Agricultural position performs unexpectedly, Lushang Property 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 Lushang Property will offset losses from the drop in Lushang Property's long position.Huasi Agricultural vs. Industrial and Commercial | Huasi Agricultural vs. Agricultural Bank of | Huasi Agricultural vs. China Construction Bank | Huasi Agricultural vs. Bank of China |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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