Correlation Between Hongfa Technology and Kuang Chi
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By analyzing existing cross correlation between Hongfa Technology Co and Kuang Chi Technologies, you can compare the effects of market volatilities on Hongfa Technology and Kuang Chi 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 Hongfa Technology with a short position of Kuang Chi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hongfa Technology and Kuang Chi.
Diversification Opportunities for Hongfa Technology and Kuang Chi
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hongfa and Kuang is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hongfa Technology Co and Kuang Chi Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuang Chi Technologies and Hongfa Technology 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 Hongfa Technology Co are associated (or correlated) with Kuang Chi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuang Chi Technologies has no effect on the direction of Hongfa Technology i.e., Hongfa Technology and Kuang Chi go up and down completely randomly.
Pair Corralation between Hongfa Technology and Kuang Chi
Assuming the 90 days trading horizon Hongfa Technology Co is expected to under-perform the Kuang Chi. But the stock apears to be less risky and, when comparing its historical volatility, Hongfa Technology Co is 2.24 times less risky than Kuang Chi. The stock trades about -0.03 of its potential returns per unit of risk. The Kuang Chi Technologies is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 4,149 in Kuang Chi Technologies on October 10, 2024 and sell it today you would lose (67.00) from holding Kuang Chi Technologies or give up 1.61% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hongfa Technology Co vs. Kuang Chi Technologies
Performance |
Timeline |
Hongfa Technology |
Kuang Chi Technologies |
Hongfa Technology and Kuang Chi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hongfa Technology and Kuang Chi
The main advantage of trading using opposite Hongfa Technology and Kuang Chi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hongfa Technology position performs unexpectedly, Kuang Chi 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 Kuang Chi will offset losses from the drop in Kuang Chi's long position.Hongfa Technology vs. Mango Excellent Media | Hongfa Technology vs. Kuangda Technology Group | Hongfa Technology vs. Heilongjiang Publishing Media | Hongfa Technology vs. Bus Online Co |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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