Correlation Between Hengli Industrial and Cultural Investment
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By analyzing existing cross correlation between Hengli Industrial Development and Cultural Investment Holdings, you can compare the effects of market volatilities on Hengli Industrial and Cultural Investment 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 Cultural Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengli Industrial and Cultural Investment.
Diversification Opportunities for Hengli Industrial and Cultural Investment
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hengli and Cultural is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hengli Industrial Development and Cultural Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cultural Investment 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 Cultural Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cultural Investment has no effect on the direction of Hengli Industrial i.e., Hengli Industrial and Cultural Investment go up and down completely randomly.
Pair Corralation between Hengli Industrial and Cultural Investment
Assuming the 90 days trading horizon Hengli Industrial Development is expected to under-perform the Cultural Investment. But the stock apears to be less risky and, when comparing its historical volatility, Hengli Industrial Development is 1.13 times less risky than Cultural Investment. The stock trades about -0.03 of its potential returns per unit of risk. The Cultural Investment Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 220.00 in Cultural Investment Holdings on September 12, 2024 and sell it today you would earn a total of 12.00 from holding Cultural Investment Holdings or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengli Industrial Development vs. Cultural Investment Holdings
Performance |
| Timeline |
| Hengli Industrial |
| Cultural Investment |
Hengli Industrial and Cultural Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengli Industrial and Cultural Investment
The main advantage of trading using opposite Hengli Industrial and Cultural Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengli Industrial position performs unexpectedly, Cultural Investment 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 Cultural Investment will offset losses from the drop in Cultural Investment's long position.| Hengli Industrial vs. Lutian Machinery Co | Hengli Industrial vs. PetroChina Co Ltd | Hengli Industrial vs. Bank of China | Hengli Industrial vs. Gansu Jiu Steel |
| Cultural Investment vs. Kweichow Moutai Co | Cultural Investment vs. Shenzhen Mindray Bio Medical | Cultural Investment vs. G bits Network Technology | Cultural Investment vs. Beijing Roborock 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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