Correlation Between Hengkang Medical and China Longyuan
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By analyzing existing cross correlation between Hengkang Medical Group and China Longyuan Power, you can compare the effects of market volatilities on Hengkang Medical and China Longyuan 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 Hengkang Medical with a short position of China Longyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengkang Medical and China Longyuan.
Diversification Opportunities for Hengkang Medical and China Longyuan
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hengkang and China is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hengkang Medical Group and China Longyuan Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Longyuan Power and Hengkang Medical 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 Hengkang Medical Group are associated (or correlated) with China Longyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Longyuan Power has no effect on the direction of Hengkang Medical i.e., Hengkang Medical and China Longyuan go up and down completely randomly.
Pair Corralation between Hengkang Medical and China Longyuan
Assuming the 90 days trading horizon Hengkang Medical Group is expected to under-perform the China Longyuan. In addition to that, Hengkang Medical is 1.48 times more volatile than China Longyuan Power. It trades about -0.02 of its total potential returns per unit of risk. China Longyuan Power is currently generating about 0.0 per unit of volatility. If you would invest 1,807 in China Longyuan Power on September 3, 2024 and sell it today you would lose (110.00) from holding China Longyuan Power or give up 6.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengkang Medical Group vs. China Longyuan Power
Performance |
| Timeline |
| Hengkang Medical |
| China Longyuan Power |
Hengkang Medical and China Longyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengkang Medical and China Longyuan
The main advantage of trading using opposite Hengkang Medical and China Longyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengkang Medical position performs unexpectedly, China Longyuan 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 China Longyuan will offset losses from the drop in China Longyuan's long position.| Hengkang Medical vs. Lander Sports Development | Hengkang Medical vs. Threes Company Media | Hengkang Medical vs. Shuhua Sports Co | Hengkang Medical vs. Shanghai Xinhua Media |
| China Longyuan vs. Guangzhou Boji Medical | China Longyuan vs. Hainan Airlines Co | China Longyuan vs. Spring Airlines Co | China Longyuan vs. Hengkang Medical Group |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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