Correlation Between Jointo Energy and Hengdian Entertainment
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By analyzing existing cross correlation between Jointo Energy Investment and Hengdian Entertainment Co, you can compare the effects of market volatilities on Jointo Energy and Hengdian Entertainment 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 Jointo Energy with a short position of Hengdian Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jointo Energy and Hengdian Entertainment.
Diversification Opportunities for Jointo Energy and Hengdian Entertainment
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jointo and Hengdian is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Jointo Energy Investment and Hengdian Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengdian Entertainment and Jointo Energy 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 Jointo Energy Investment are associated (or correlated) with Hengdian Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengdian Entertainment has no effect on the direction of Jointo Energy i.e., Jointo Energy and Hengdian Entertainment go up and down completely randomly.
Pair Corralation between Jointo Energy and Hengdian Entertainment
Assuming the 90 days trading horizon Jointo Energy is expected to generate 34.28 times less return on investment than Hengdian Entertainment. But when comparing it to its historical volatility, Jointo Energy Investment is 3.15 times less risky than Hengdian Entertainment. It trades about 0.02 of its potential returns per unit of risk. Hengdian Entertainment Co is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,260 in Hengdian Entertainment Co on September 4, 2024 and sell it today you would earn a total of 256.00 from holding Hengdian Entertainment Co or generate 20.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jointo Energy Investment vs. Hengdian Entertainment Co
Performance |
| Timeline |
| Jointo Energy Investment |
| Hengdian Entertainment |
Jointo Energy and Hengdian Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jointo Energy and Hengdian Entertainment
The main advantage of trading using opposite Jointo Energy and Hengdian Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jointo Energy position performs unexpectedly, Hengdian Entertainment 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 Hengdian Entertainment will offset losses from the drop in Hengdian Entertainment's long position.| Jointo Energy vs. Industrial and Commercial | Jointo Energy vs. Agricultural Bank of | Jointo Energy vs. China Construction Bank | Jointo Energy vs. Bank of China |
| Hengdian Entertainment vs. China State Construction | Hengdian Entertainment vs. Poly Real Estate | Hengdian Entertainment vs. China Vanke Co | Hengdian Entertainment vs. China Merchants Shekou |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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