Correlation Between Hengli Industrial and Shenwu Energy
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By analyzing existing cross correlation between Hengli Industrial Development and Shenwu Energy Saving, you can compare the effects of market volatilities on Hengli Industrial and Shenwu Energy 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 Hengli Industrial with a short position of Shenwu Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengli Industrial and Shenwu Energy.
Diversification Opportunities for Hengli Industrial and Shenwu Energy
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hengli and Shenwu is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hengli Industrial Development and Shenwu Energy Saving in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenwu Energy Saving and Hengli Industrial 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 Hengli Industrial Development are associated (or correlated) with Shenwu Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenwu Energy Saving has no effect on the direction of Hengli Industrial i.e., Hengli Industrial and Shenwu Energy go up and down completely randomly.
Pair Corralation between Hengli Industrial and Shenwu Energy
Assuming the 90 days trading horizon Hengli Industrial Development is expected to under-perform the Shenwu Energy. But the stock apears to be less risky and, when comparing its historical volatility, Hengli Industrial Development is 1.1 times less risky than Shenwu Energy. The stock trades about -0.03 of its potential returns per unit of risk. The Shenwu Energy Saving is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 302.00 in Shenwu Energy Saving on October 12, 2024 and sell it today you would earn a total of 87.00 from holding Shenwu Energy Saving or generate 28.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengli Industrial Development vs. Shenwu Energy Saving
Performance |
| Timeline |
| Hengli Industrial |
| Shenwu Energy Saving |
Hengli Industrial and Shenwu Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengli Industrial and Shenwu Energy
The main advantage of trading using opposite Hengli Industrial and Shenwu Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengli Industrial position performs unexpectedly, Shenwu Energy 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 Shenwu Energy will offset losses from the drop in Shenwu Energy's long position.| Hengli Industrial vs. Tsingtao Brewery Co | Hengli Industrial vs. Dawning Information Industry | Hengli Industrial vs. Wuhan Yangtze Communication | Hengli Industrial vs. Unisplendour Corp |
| Shenwu Energy vs. CITIC Guoan Information | Shenwu Energy vs. Chengdu Spaceon Electronics | Shenwu Energy vs. Digital China Information | Shenwu Energy vs. Shanghai CEO Environmental |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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