Correlation Between Hengli Petrochemical and Focus Media
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By analyzing existing cross correlation between Hengli Petrochemical Co and Focus Media Information, you can compare the effects of market volatilities on Hengli Petrochemical and Focus Media 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 Focus Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengli Petrochemical and Focus Media.
Diversification Opportunities for Hengli Petrochemical and Focus Media
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hengli and Focus is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hengli Petrochemical Co and Focus Media Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Media Information 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 Focus Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Media Information has no effect on the direction of Hengli Petrochemical i.e., Hengli Petrochemical and Focus Media go up and down completely randomly.
Pair Corralation between Hengli Petrochemical and Focus Media
Assuming the 90 days trading horizon Hengli Petrochemical Co is expected to generate 1.15 times more return on investment than Focus Media. However, Hengli Petrochemical is 1.15 times more volatile than Focus Media Information. It trades about 0.06 of its potential returns per unit of risk. Focus Media Information is currently generating about -0.16 per unit of risk. If you would invest 1,504 in Hengli Petrochemical Co on September 15, 2024 and sell it today you would earn a total of 27.00 from holding Hengli Petrochemical Co or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengli Petrochemical Co vs. Focus Media Information
Performance |
| Timeline |
| Hengli Petrochemical |
| Focus Media Information |
Hengli Petrochemical and Focus Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengli Petrochemical and Focus Media
The main advantage of trading using opposite Hengli Petrochemical and Focus Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengli Petrochemical position performs unexpectedly, Focus Media 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 Focus Media will offset losses from the drop in Focus Media's long position.| Hengli Petrochemical vs. Focus Media Information | Hengli Petrochemical vs. Inly Media Co | Hengli Petrochemical vs. Dezhan HealthCare Co | Hengli Petrochemical vs. Anhui Huaren Health |
| Focus Media vs. Xinke Material | Focus Media vs. Guangzhou Tinci Materials | Focus Media vs. Shanghai Ziyan Foods | Focus Media vs. Shantou Wanshun Package |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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