Correlation Between Hengli Industrial and Leyard Optoelectronic
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By analyzing existing cross correlation between Hengli Industrial Development and Leyard Optoelectronic, you can compare the effects of market volatilities on Hengli Industrial and Leyard Optoelectronic 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 Leyard Optoelectronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengli Industrial and Leyard Optoelectronic.
Diversification Opportunities for Hengli Industrial and Leyard Optoelectronic
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hengli and Leyard is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hengli Industrial Development and Leyard Optoelectronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leyard Optoelectronic 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 Leyard Optoelectronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leyard Optoelectronic has no effect on the direction of Hengli Industrial i.e., Hengli Industrial and Leyard Optoelectronic go up and down completely randomly.
Pair Corralation between Hengli Industrial and Leyard Optoelectronic
Assuming the 90 days trading horizon Hengli Industrial Development is expected to generate 0.66 times more return on investment than Leyard Optoelectronic. However, Hengli Industrial Development is 1.51 times less risky than Leyard Optoelectronic. It trades about 0.2 of its potential returns per unit of risk. Leyard Optoelectronic is currently generating about 0.07 per unit of risk. If you would invest 211.00 in Hengli Industrial Development on November 5, 2024 and sell it today you would earn a total of 19.00 from holding Hengli Industrial Development or generate 9.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengli Industrial Development vs. Leyard Optoelectronic
Performance |
| Timeline |
| Hengli Industrial |
| Leyard Optoelectronic |
Hengli Industrial and Leyard Optoelectronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengli Industrial and Leyard Optoelectronic
The main advantage of trading using opposite Hengli Industrial and Leyard Optoelectronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengli Industrial position performs unexpectedly, Leyard Optoelectronic 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 Leyard Optoelectronic will offset losses from the drop in Leyard Optoelectronic's long position.| Hengli Industrial vs. Hainan Haiqi Transportation | Hengli Industrial vs. Guangdong Silvere Sci | Hengli Industrial vs. Shuhua Sports Co | Hengli Industrial vs. Fujian Oriental Silver |
| Leyard Optoelectronic vs. Ziel Home Furnishing | Leyard Optoelectronic vs. Tianjin Ruixin Technology | Leyard Optoelectronic vs. Hunan Mendale Hometextile | Leyard Optoelectronic vs. Hubei Forbon Technology |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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