Correlation Between Xilong Chemical and Hengdian Entertainment
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By analyzing existing cross correlation between Xilong Chemical Co and Hengdian Entertainment Co, you can compare the effects of market volatilities on Xilong 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 Xilong Chemical with a short position of Hengdian Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xilong Chemical and Hengdian Entertainment.
Diversification Opportunities for Xilong Chemical and Hengdian Entertainment
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xilong and Hengdian is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Xilong Chemical Co and Hengdian Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengdian Entertainment and Xilong 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 Xilong Chemical Co 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 Xilong Chemical i.e., Xilong Chemical and Hengdian Entertainment go up and down completely randomly.
Pair Corralation between Xilong Chemical and Hengdian Entertainment
Assuming the 90 days trading horizon Xilong Chemical Co is expected to generate 1.18 times more return on investment than Hengdian Entertainment. However, Xilong Chemical is 1.18 times more volatile than Hengdian Entertainment Co. It trades about 0.02 of its potential returns per unit of risk. Hengdian Entertainment Co is currently generating about 0.02 per unit of risk. If you would invest 726.00 in Xilong Chemical Co on November 2, 2024 and sell it today you would earn a total of 55.00 from holding Xilong Chemical Co or generate 7.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xilong Chemical Co vs. Hengdian Entertainment Co
Performance |
| Timeline |
| Xilong Chemical |
| Hengdian Entertainment |
Xilong Chemical and Hengdian Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xilong Chemical and Hengdian Entertainment
The main advantage of trading using opposite Xilong Chemical and Hengdian Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xilong 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.| Xilong Chemical vs. Zijin Mining Group | Xilong Chemical vs. Wanhua Chemical Group | Xilong Chemical vs. Baoshan Iron Steel | Xilong Chemical vs. Shandong Gold Mining |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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