Correlation Between Hengli Industrial and Longxing Chemical
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By analyzing existing cross correlation between Hengli Industrial Development and Longxing Chemical Stock, you can compare the effects of market volatilities on Hengli Industrial and Longxing Chemical 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 Longxing Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengli Industrial and Longxing Chemical.
Diversification Opportunities for Hengli Industrial and Longxing Chemical
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hengli and Longxing is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hengli Industrial Development and Longxing Chemical Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longxing Chemical Stock 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 Longxing Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longxing Chemical Stock has no effect on the direction of Hengli Industrial i.e., Hengli Industrial and Longxing Chemical go up and down completely randomly.
Pair Corralation between Hengli Industrial and Longxing Chemical
Assuming the 90 days trading horizon Hengli Industrial Development is expected to generate 1.66 times more return on investment than Longxing Chemical. However, Hengli Industrial is 1.66 times more volatile than Longxing Chemical Stock. It trades about 0.18 of its potential returns per unit of risk. Longxing Chemical Stock is currently generating about 0.1 per unit of risk. If you would invest 113.00 in Hengli Industrial Development on September 3, 2024 and sell it today you would earn a total of 117.00 from holding Hengli Industrial Development or generate 103.54% 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. Longxing Chemical Stock
Performance |
| Timeline |
| Hengli Industrial |
| Longxing Chemical Stock |
Hengli Industrial and Longxing Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengli Industrial and Longxing Chemical
The main advantage of trading using opposite Hengli Industrial and Longxing Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengli Industrial position performs unexpectedly, Longxing Chemical 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 Longxing Chemical will offset losses from the drop in Longxing Chemical's long position.| Hengli Industrial vs. China Sports Industry | Hengli Industrial vs. Sunny Loan Top | Hengli Industrial vs. Jilin Jlu Communication | Hengli Industrial vs. Guangdong Shenglu Telecommunication |
| Longxing Chemical vs. Guangdong Liantai Environmental | Longxing Chemical vs. Hengli Industrial Development | Longxing Chemical vs. Lingyuan Iron Steel | Longxing Chemical vs. Dongjiang Environmental Co |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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