Correlation Between Hengkang Medical and Long Yuan
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By analyzing existing cross correlation between Hengkang Medical Group and Long Yuan Construction, you can compare the effects of market volatilities on Hengkang Medical and Long Yuan 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 Long Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengkang Medical and Long Yuan.
Diversification Opportunities for Hengkang Medical and Long Yuan
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hengkang and Long is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hengkang Medical Group and Long Yuan Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long Yuan Construction 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 Long Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long Yuan Construction has no effect on the direction of Hengkang Medical i.e., Hengkang Medical and Long Yuan go up and down completely randomly.
Pair Corralation between Hengkang Medical and Long Yuan
Assuming the 90 days trading horizon Hengkang Medical Group is expected to under-perform the Long Yuan. In addition to that, Hengkang Medical is 1.06 times more volatile than Long Yuan Construction. It trades about -0.04 of its total potential returns per unit of risk. Long Yuan Construction is currently generating about -0.01 per unit of volatility. If you would invest 475.00 in Long Yuan Construction on October 30, 2024 and sell it today you would lose (109.00) from holding Long Yuan Construction or give up 22.95% 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. Long Yuan Construction
Performance |
| Timeline |
| Hengkang Medical |
| Long Yuan Construction |
Hengkang Medical and Long Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengkang Medical and Long Yuan
The main advantage of trading using opposite Hengkang Medical and Long Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengkang Medical position performs unexpectedly, Long Yuan 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 Long Yuan will offset losses from the drop in Long Yuan's long position.| Hengkang Medical vs. Railway Signal Communication | Hengkang Medical vs. Hongrun Construction Group | Hengkang Medical vs. Guangzhou Haige Communications | Hengkang Medical vs. Wintao Communications Co |
| Long Yuan vs. COL Digital Publishing | Long Yuan vs. Shenzhen Zhongzhuang Construction | Long Yuan vs. XCMG Construction Machinery | Long Yuan vs. Zhangjiagang Freetrade Science |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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