Correlation Between Hengli Industrial and Tonghua Grape
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By analyzing existing cross correlation between Hengli Industrial Development and Tonghua Grape Wine, you can compare the effects of market volatilities on Hengli Industrial and Tonghua Grape 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 Tonghua Grape. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengli Industrial and Tonghua Grape.
Diversification Opportunities for Hengli Industrial and Tonghua Grape
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hengli and Tonghua is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hengli Industrial Development and Tonghua Grape Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tonghua Grape Wine 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 Tonghua Grape. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tonghua Grape Wine has no effect on the direction of Hengli Industrial i.e., Hengli Industrial and Tonghua Grape go up and down completely randomly.
Pair Corralation between Hengli Industrial and Tonghua Grape
Assuming the 90 days trading horizon Hengli Industrial Development is expected to under-perform the Tonghua Grape. In addition to that, Hengli Industrial is 1.38 times more volatile than Tonghua Grape Wine. It trades about -0.02 of its total potential returns per unit of risk. Tonghua Grape Wine is currently generating about -0.03 per unit of volatility. If you would invest 422.00 in Tonghua Grape Wine on October 16, 2024 and sell it today you would lose (171.00) from holding Tonghua Grape Wine or give up 40.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengli Industrial Development vs. Tonghua Grape Wine
Performance |
| Timeline |
| Hengli Industrial |
| Tonghua Grape Wine |
Hengli Industrial and Tonghua Grape Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengli Industrial and Tonghua Grape
The main advantage of trading using opposite Hengli Industrial and Tonghua Grape positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengli Industrial position performs unexpectedly, Tonghua Grape 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 Tonghua Grape will offset losses from the drop in Tonghua Grape's long position.| Hengli Industrial vs. Shanghai Material Trading | Hengli Industrial vs. Jointo Energy Investment | Hengli Industrial vs. Beijing Mainstreets Investment | Hengli Industrial vs. Hubei Geoway Investment |
| Tonghua Grape vs. Peoples Insurance of | Tonghua Grape vs. Guangdong Jingyi Metal | Tonghua Grape vs. China Minmetals Rare | Tonghua Grape vs. Hengli Industrial Development |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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