Correlation Between Hengerda New and Shenzhen Inovance
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By analyzing existing cross correlation between Hengerda New Materials and Shenzhen Inovance Tech, you can compare the effects of market volatilities on Hengerda New and Shenzhen Inovance 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 Hengerda New with a short position of Shenzhen Inovance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengerda New and Shenzhen Inovance.
Diversification Opportunities for Hengerda New and Shenzhen Inovance
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hengerda and Shenzhen is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hengerda New Materials and Shenzhen Inovance Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Inovance Tech and Hengerda New 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 Hengerda New Materials are associated (or correlated) with Shenzhen Inovance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Inovance Tech has no effect on the direction of Hengerda New i.e., Hengerda New and Shenzhen Inovance go up and down completely randomly.
Pair Corralation between Hengerda New and Shenzhen Inovance
Assuming the 90 days trading horizon Hengerda New Materials is expected to generate 1.75 times more return on investment than Shenzhen Inovance. However, Hengerda New is 1.75 times more volatile than Shenzhen Inovance Tech. It trades about 0.09 of its potential returns per unit of risk. Shenzhen Inovance Tech is currently generating about 0.06 per unit of risk. If you would invest 2,740 in Hengerda New Materials on September 28, 2024 and sell it today you would earn a total of 122.00 from holding Hengerda New Materials or generate 4.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengerda New Materials vs. Shenzhen Inovance Tech
Performance |
| Timeline |
| Hengerda New Materials |
| Shenzhen Inovance Tech |
Hengerda New and Shenzhen Inovance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengerda New and Shenzhen Inovance
The main advantage of trading using opposite Hengerda New and Shenzhen Inovance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengerda New position performs unexpectedly, Shenzhen Inovance 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 Shenzhen Inovance will offset losses from the drop in Shenzhen Inovance's long position.| Hengerda New vs. Bank of China | Hengerda New vs. Kweichow Moutai Co | Hengerda New vs. PetroChina Co Ltd | Hengerda New vs. Bank of Communications |
| Shenzhen Inovance vs. Innovative Medical Management | Shenzhen Inovance vs. Gifore Agricultural Machinery | Shenzhen Inovance vs. JCHX Mining Management | Shenzhen Inovance vs. Long Yuan Construction |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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