Correlation Between Weihai Honglin and Cultural Investment
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By analyzing existing cross correlation between Weihai Honglin Electronic and Cultural Investment Holdings, you can compare the effects of market volatilities on Weihai Honglin and Cultural Investment 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 Weihai Honglin with a short position of Cultural Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weihai Honglin and Cultural Investment.
Diversification Opportunities for Weihai Honglin and Cultural Investment
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Weihai and Cultural is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Weihai Honglin Electronic and Cultural Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cultural Investment and Weihai Honglin 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 Weihai Honglin Electronic are associated (or correlated) with Cultural Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cultural Investment has no effect on the direction of Weihai Honglin i.e., Weihai Honglin and Cultural Investment go up and down completely randomly.
Pair Corralation between Weihai Honglin and Cultural Investment
Assuming the 90 days trading horizon Weihai Honglin Electronic is expected to under-perform the Cultural Investment. But the stock apears to be less risky and, when comparing its historical volatility, Weihai Honglin Electronic is 1.74 times less risky than Cultural Investment. The stock trades about -0.05 of its potential returns per unit of risk. The Cultural Investment Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 206.00 in Cultural Investment Holdings on September 1, 2024 and sell it today you would earn a total of 14.00 from holding Cultural Investment Holdings or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weihai Honglin Electronic vs. Cultural Investment Holdings
Performance |
| Timeline |
| Weihai Honglin Electronic |
| Cultural Investment |
Weihai Honglin and Cultural Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weihai Honglin and Cultural Investment
The main advantage of trading using opposite Weihai Honglin and Cultural Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weihai Honglin position performs unexpectedly, Cultural Investment 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 Cultural Investment will offset losses from the drop in Cultural Investment's long position.| Weihai Honglin vs. Cultural Investment Holdings | Weihai Honglin vs. Gome Telecom Equipment | Weihai Honglin vs. Bus Online Co | Weihai Honglin vs. Holitech Technology Co |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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