Correlation Between Longxing Chemical and Hengdian Entertainment
Specify exactly 2 symbols:
By analyzing existing cross correlation between Longxing Chemical Stock and Hengdian Entertainment Co, you can compare the effects of market volatilities on Longxing Chemical and Hengdian Entertainment 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 Longxing Chemical with a short position of Hengdian Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longxing Chemical and Hengdian Entertainment.
Diversification Opportunities for Longxing Chemical and Hengdian Entertainment
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Longxing and Hengdian is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Longxing Chemical Stock and Hengdian Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengdian Entertainment and Longxing Chemical 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 Longxing Chemical Stock are associated (or correlated) with Hengdian Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengdian Entertainment has no effect on the direction of Longxing Chemical i.e., Longxing Chemical and Hengdian Entertainment go up and down completely randomly.
Pair Corralation between Longxing Chemical and Hengdian Entertainment
Assuming the 90 days trading horizon Longxing Chemical is expected to generate 1.64 times less return on investment than Hengdian Entertainment. But when comparing it to its historical volatility, Longxing Chemical Stock is 1.22 times less risky than Hengdian Entertainment. It trades about 0.01 of its potential returns per unit of risk. Hengdian Entertainment Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,432 in Hengdian Entertainment Co on November 2, 2024 and sell it today you would earn a total of 43.00 from holding Hengdian Entertainment Co or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longxing Chemical Stock vs. Hengdian Entertainment Co
Performance |
| Timeline |
| Longxing Chemical Stock |
| Hengdian Entertainment |
Longxing Chemical and Hengdian Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longxing Chemical and Hengdian Entertainment
The main advantage of trading using opposite Longxing Chemical and Hengdian Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longxing Chemical position performs unexpectedly, Hengdian Entertainment 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 Hengdian Entertainment will offset losses from the drop in Hengdian Entertainment's long position.The idea behind Longxing Chemical Stock and Hengdian Entertainment Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Hengdian Entertainment vs. PetroChina Co Ltd | Hengdian Entertainment vs. Industrial and Commercial | Hengdian Entertainment vs. China Petroleum Chemical | Hengdian Entertainment vs. China Construction Bank |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |