Correlation Between Hengli Petrochemical and City Development
Specify exactly 2 symbols:
By analyzing existing cross correlation between Hengli Petrochemical Co and City Development Environment, you can compare the effects of market volatilities on Hengli Petrochemical and City Development 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 Hengli Petrochemical with a short position of City Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengli Petrochemical and City Development.
Diversification Opportunities for Hengli Petrochemical and City Development
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hengli and City is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hengli Petrochemical Co and City Development Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Development Env and Hengli Petrochemical 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 Hengli Petrochemical Co are associated (or correlated) with City Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Development Env has no effect on the direction of Hengli Petrochemical i.e., Hengli Petrochemical and City Development go up and down completely randomly.
Pair Corralation between Hengli Petrochemical and City Development
Assuming the 90 days trading horizon Hengli Petrochemical Co is expected to under-perform the City Development. But the stock apears to be less risky and, when comparing its historical volatility, Hengli Petrochemical Co is 1.26 times less risky than City Development. The stock trades about -0.01 of its potential returns per unit of risk. The City Development Environment is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,264 in City Development Environment on November 7, 2024 and sell it today you would earn a total of 19.00 from holding City Development Environment or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengli Petrochemical Co vs. City Development Environment
Performance |
| Timeline |
| Hengli Petrochemical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| City Development Env |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hengli Petrochemical and City Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengli Petrochemical and City Development
The main advantage of trading using opposite Hengli Petrochemical and City Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengli Petrochemical position performs unexpectedly, City Development 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 City Development will offset losses from the drop in City Development's long position.The idea behind Hengli Petrochemical Co and City Development Environment 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.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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |