Correlation Between China Sports and Hengli Industrial
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By analyzing existing cross correlation between China Sports Industry and Hengli Industrial Development, you can compare the effects of market volatilities on China Sports 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 China Sports with a short position of Hengli Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Sports and Hengli Industrial.
Diversification Opportunities for China Sports and Hengli Industrial
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Hengli is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding China Sports Industry and Hengli Industrial Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Industrial and China Sports 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 China Sports Industry 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 China Sports i.e., China Sports and Hengli Industrial go up and down completely randomly.
Pair Corralation between China Sports and Hengli Industrial
Assuming the 90 days trading horizon China Sports Industry is expected to generate 0.6 times more return on investment than Hengli Industrial. However, China Sports Industry is 1.68 times less risky than Hengli Industrial. It trades about -0.03 of its potential returns per unit of risk. Hengli Industrial Development is currently generating about -0.02 per unit of risk. If you would invest 1,155 in China Sports Industry on September 4, 2024 and sell it today you would lose (296.00) from holding China Sports Industry or give up 25.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Sports Industry vs. Hengli Industrial Development
Performance |
| Timeline |
| China Sports Industry |
| Hengli Industrial |
China Sports and Hengli Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Sports and Hengli Industrial
The main advantage of trading using opposite China Sports and Hengli Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Sports 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.| China Sports vs. Guangzhou Haige Communications | China Sports vs. Orinko Advanced Plastics | China Sports vs. Wuhan Yangtze Communication | China Sports vs. Zhongtong Guomai Communication |
| Hengli Industrial vs. Cultural Investment Holdings | Hengli Industrial vs. Gome Telecom Equipment | Hengli Industrial vs. Bus Online Co | Hengli Industrial 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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