Correlation Between Huaneng Lancang and Hengli Industrial
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By analyzing existing cross correlation between Huaneng Lancang River and Hengli Industrial Development, you can compare the effects of market volatilities on Huaneng Lancang and Hengli Industrial 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 Huaneng Lancang with a short position of Hengli Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huaneng Lancang and Hengli Industrial.
Diversification Opportunities for Huaneng Lancang and Hengli Industrial
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Huaneng and Hengli is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Huaneng Lancang River and Hengli Industrial Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Industrial and Huaneng Lancang 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 Huaneng Lancang River are associated (or correlated) with Hengli Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengli Industrial has no effect on the direction of Huaneng Lancang i.e., Huaneng Lancang and Hengli Industrial go up and down completely randomly.
Pair Corralation between Huaneng Lancang and Hengli Industrial
Assuming the 90 days trading horizon Huaneng Lancang River is expected to under-perform the Hengli Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Huaneng Lancang River is 3.45 times less risky than Hengli Industrial. The stock trades about -0.16 of its potential returns per unit of risk. The Hengli Industrial Development is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 181.00 in Hengli Industrial Development on September 1, 2024 and sell it today you would earn a total of 49.00 from holding Hengli Industrial Development or generate 27.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huaneng Lancang River vs. Hengli Industrial Development
Performance |
| Timeline |
| Huaneng Lancang River |
| Hengli Industrial |
Huaneng Lancang and Hengli Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huaneng Lancang and Hengli Industrial
The main advantage of trading using opposite Huaneng Lancang and Hengli Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huaneng Lancang position performs unexpectedly, Hengli Industrial 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 Hengli Industrial will offset losses from the drop in Hengli Industrial's long position.| Huaneng Lancang vs. Ligao Foods CoLtd | Huaneng Lancang vs. China Publishing Media | Huaneng Lancang vs. Dook Media Group | Huaneng Lancang vs. Anji Foodstuff Co |
| Hengli Industrial vs. Shenzhen Centralcon Investment | Hengli Industrial vs. Guangzhou Zhujiang Brewery | Hengli Industrial vs. Beijing Mainstreets Investment | Hengli Industrial vs. Tongyu Communication |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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