Correlation Between Hunan TV and Bohai Leasing
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By analyzing existing cross correlation between Hunan TV Broadcast and Bohai Leasing Co, you can compare the effects of market volatilities on Hunan TV and Bohai Leasing 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 Hunan TV with a short position of Bohai Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan TV and Bohai Leasing.
Diversification Opportunities for Hunan TV and Bohai Leasing
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hunan and Bohai is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hunan TV Broadcast and Bohai Leasing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bohai Leasing and Hunan TV 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 Hunan TV Broadcast are associated (or correlated) with Bohai Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bohai Leasing has no effect on the direction of Hunan TV i.e., Hunan TV and Bohai Leasing go up and down completely randomly.
Pair Corralation between Hunan TV and Bohai Leasing
Assuming the 90 days trading horizon Hunan TV Broadcast is expected to under-perform the Bohai Leasing. In addition to that, Hunan TV is 1.48 times more volatile than Bohai Leasing Co. It trades about -0.5 of its total potential returns per unit of risk. Bohai Leasing Co is currently generating about -0.43 per unit of volatility. If you would invest 402.00 in Bohai Leasing Co on October 16, 2024 and sell it today you would lose (62.00) from holding Bohai Leasing Co or give up 15.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan TV Broadcast vs. Bohai Leasing Co
Performance |
| Timeline |
| Hunan TV Broadcast |
| Bohai Leasing |
Hunan TV and Bohai Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan TV and Bohai Leasing
The main advantage of trading using opposite Hunan TV and Bohai Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan TV position performs unexpectedly, Bohai Leasing 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 Bohai Leasing will offset losses from the drop in Bohai Leasing's long position.| Hunan TV vs. Qingdao Foods Co | Hunan TV vs. Youyou Foods Co | Hunan TV vs. Shenzhen Topway Video | Hunan TV vs. Gan Yuan Foods |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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