Correlation Between Dook Media and Hengdian Entertainment
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By analyzing existing cross correlation between Dook Media Group and Hengdian Entertainment Co, you can compare the effects of market volatilities on Dook Media 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 Dook Media with a short position of Hengdian Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dook Media and Hengdian Entertainment.
Diversification Opportunities for Dook Media and Hengdian Entertainment
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dook and Hengdian is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Dook Media Group and Hengdian Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengdian Entertainment and Dook Media 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 Dook Media Group 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 Dook Media i.e., Dook Media and Hengdian Entertainment go up and down completely randomly.
Pair Corralation between Dook Media and Hengdian Entertainment
Assuming the 90 days trading horizon Dook Media Group is expected to generate 1.63 times more return on investment than Hengdian Entertainment. However, Dook Media is 1.63 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 -0.01 per unit of risk. If you would invest 1,277 in Dook Media Group on September 4, 2024 and sell it today you would lose (113.00) from holding Dook Media Group or give up 8.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dook Media Group vs. Hengdian Entertainment Co
Performance |
| Timeline |
| Dook Media Group |
| Hengdian Entertainment |
Dook Media and Hengdian Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dook Media and Hengdian Entertainment
The main advantage of trading using opposite Dook Media and Hengdian Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dook Media 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 Dook Media Group 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. China State Construction | Hengdian Entertainment vs. Poly Real Estate | Hengdian Entertainment vs. China Vanke Co | Hengdian Entertainment vs. China Merchants Shekou |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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