Correlation Between Hengli Industrial and Pengxin International
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By analyzing existing cross correlation between Hengli Industrial Development and Pengxin International Mining, you can compare the effects of market volatilities on Hengli Industrial and Pengxin International 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 Pengxin International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengli Industrial and Pengxin International.
Diversification Opportunities for Hengli Industrial and Pengxin International
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hengli and Pengxin is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hengli Industrial Development and Pengxin International Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pengxin International 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 Pengxin International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pengxin International has no effect on the direction of Hengli Industrial i.e., Hengli Industrial and Pengxin International go up and down completely randomly.
Pair Corralation between Hengli Industrial and Pengxin International
Assuming the 90 days trading horizon Hengli Industrial Development is expected to generate 0.9 times more return on investment than Pengxin International. However, Hengli Industrial Development is 1.11 times less risky than Pengxin International. It trades about 0.2 of its potential returns per unit of risk. Pengxin International Mining is currently generating about 0.11 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. Pengxin International Mining
Performance |
| Timeline |
| Hengli Industrial |
| Pengxin International |
Hengli Industrial and Pengxin International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengli Industrial and Pengxin International
The main advantage of trading using opposite Hengli Industrial and Pengxin International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengli Industrial position performs unexpectedly, Pengxin International 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 Pengxin International will offset losses from the drop in Pengxin International'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 |
| Pengxin International vs. Zijin Mining Group | Pengxin International vs. Wanhua Chemical Group | Pengxin International vs. Baoshan Iron Steel | Pengxin International vs. Shandong Gold Mining |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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