Correlation Between China Securities and Hengli Industrial
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By analyzing existing cross correlation between China Securities 800 and Hengli Industrial Development, you can compare the effects of market volatilities on China Securities and Hengli Industrial 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 China Securities with a short position of Hengli Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Hengli Industrial.
Diversification Opportunities for China Securities and Hengli Industrial
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Hengli is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Hengli Industrial Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Industrial and China Securities 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 China Securities 800 are associated (or correlated) with Hengli Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengli Industrial has no effect on the direction of China Securities i.e., China Securities and Hengli Industrial go up and down completely randomly.
Pair Corralation between China Securities and Hengli Industrial
Assuming the 90 days trading horizon China Securities 800 is expected to under-perform the Hengli Industrial. But the index apears to be less risky and, when comparing its historical volatility, China Securities 800 is 2.81 times less risky than Hengli Industrial. The index trades about -0.02 of its potential returns per unit of risk. The Hengli Industrial Development is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 185.00 in Hengli Industrial Development on September 3, 2024 and sell it today you would earn a total of 45.00 from holding Hengli Industrial Development or generate 24.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. Hengli Industrial Development
Performance |
| Timeline |
China Securities and Hengli Industrial Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Hengli Industrial Development
Pair trading matchups for Hengli Industrial
Pair Trading with China Securities and Hengli Industrial
The main advantage of trading using opposite China Securities and Hengli Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Hengli Industrial 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 Hengli Industrial will offset losses from the drop in Hengli Industrial's long position.| China Securities vs. Guilin Seamild Foods | China Securities vs. HaiXin Foods Co | China Securities vs. Zhejiang Publishing Media | China Securities vs. Eastroc Beverage Group |
| Hengli Industrial vs. China Sports Industry | Hengli Industrial vs. Sunny Loan Top | Hengli Industrial vs. Jilin Jlu Communication | Hengli Industrial vs. Guangdong Shenglu Telecommunication |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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