Correlation Between Guangdong Jinma and Hengdian Entertainment
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By analyzing existing cross correlation between Guangdong Jinma Entertainment and Hengdian Entertainment Co, you can compare the effects of market volatilities on Guangdong Jinma 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 Guangdong Jinma with a short position of Hengdian Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jinma and Hengdian Entertainment.
Diversification Opportunities for Guangdong Jinma and Hengdian Entertainment
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Hengdian is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jinma Entertainment and Hengdian Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengdian Entertainment and Guangdong Jinma 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 Guangdong Jinma Entertainment 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 Guangdong Jinma i.e., Guangdong Jinma and Hengdian Entertainment go up and down completely randomly.
Pair Corralation between Guangdong Jinma and Hengdian Entertainment
Assuming the 90 days trading horizon Guangdong Jinma Entertainment is expected to generate 0.91 times more return on investment than Hengdian Entertainment. However, Guangdong Jinma Entertainment is 1.09 times less risky than Hengdian Entertainment. It trades about 0.26 of its potential returns per unit of risk. Hengdian Entertainment Co is currently generating about 0.07 per unit of risk. If you would invest 1,449 in Guangdong Jinma Entertainment on November 3, 2024 and sell it today you would earn a total of 215.00 from holding Guangdong Jinma Entertainment or generate 14.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Jinma Entertainment vs. Hengdian Entertainment Co
Performance |
| Timeline |
| Guangdong Jinma Ente |
| Hengdian Entertainment |
Guangdong Jinma and Hengdian Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Jinma and Hengdian Entertainment
The main advantage of trading using opposite Guangdong Jinma and Hengdian Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jinma 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.| Guangdong Jinma vs. Hefei Metalforming Mach | Guangdong Jinma vs. Beijing Bewinner Communications | Guangdong Jinma vs. Dr Peng Telecom | Guangdong Jinma vs. Anhui Tongguan Copper |
| Hengdian Entertainment vs. China World Trade | Hengdian Entertainment vs. Shandong Longquan Pipeline | Hengdian Entertainment vs. Linewell Software Co | Hengdian Entertainment vs. Guangdong Jingyi Metal |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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