Correlation Between Fujian Nanwang and Hengdian Entertainment
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By analyzing existing cross correlation between Fujian Nanwang Environment and Hengdian Entertainment Co, you can compare the effects of market volatilities on Fujian Nanwang 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 Fujian Nanwang with a short position of Hengdian Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Nanwang and Hengdian Entertainment.
Diversification Opportunities for Fujian Nanwang and Hengdian Entertainment
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fujian and Hengdian is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Nanwang Environment and Hengdian Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengdian Entertainment and Fujian Nanwang 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 Fujian Nanwang Environment 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 Fujian Nanwang i.e., Fujian Nanwang and Hengdian Entertainment go up and down completely randomly.
Pair Corralation between Fujian Nanwang and Hengdian Entertainment
Assuming the 90 days trading horizon Fujian Nanwang Environment is expected to under-perform the Hengdian Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Fujian Nanwang Environment is 1.04 times less risky than Hengdian Entertainment. The stock trades about -0.23 of its potential returns per unit of risk. The Hengdian Entertainment Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,439 in Hengdian Entertainment Co on November 1, 2024 and sell it today you would earn a total of 36.00 from holding Hengdian Entertainment Co or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Nanwang Environment vs. Hengdian Entertainment Co
Performance |
| Timeline |
| Fujian Nanwang Envir |
| Hengdian Entertainment |
Fujian Nanwang and Hengdian Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Nanwang and Hengdian Entertainment
The main advantage of trading using opposite Fujian Nanwang and Hengdian Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Nanwang 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.| Fujian Nanwang vs. Chongqing Road Bridge | Fujian Nanwang vs. Nanjing OLO Home | Fujian Nanwang vs. Xiamen Goldenhome Co | Fujian Nanwang vs. Vohringer Home Technology |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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