Correlation Between Huaxia Fund and Xiamen ITG

Can any of the company-specific risk be diversified away by investing in both Huaxia Fund and Xiamen ITG 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 Huaxia Fund and Xiamen ITG into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Huaxia Fund and Xiamen ITG

0.0

Correlation Coefficient

Huaxia Fund  Xiamen ITG

Pay attention - limited upside

The 3 months correlation between Huaxia and Xiamen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Huaxia Fund Management and Xiamen ITG Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen ITG Group and Huaxia 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 Huaxia Fund Management are associated (or correlated) with Xiamen ITG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen ITG Group has no effect on the direction of Huaxia Fund i.e., Huaxia Fund and Xiamen ITG go up and down completely randomly.

Pair Corralation between Huaxia Fund and Xiamen ITG

If you would invest  288.00  in Huaxia Fund Management on October 25, 2024 and sell it today you would earn a total of  23.00  from holding Huaxia Fund Management or generate 7.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Huaxia Fund Management  vs.  Xiamen ITG Group

Huaxia Fund Management

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Huaxia Fund Management are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Huaxia Fund sustained solid returns over the last few months and may actually be approaching a breakup point.

Xiamen ITG Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xiamen ITG Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Xiamen ITG is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Huaxia Fund and Xiamen ITG

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

The idea behind Huaxia Fund Management and Xiamen ITG Group 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.