Correlation Between Hengli Petrochemical and Meinian Onehealth
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By analyzing existing cross correlation between Hengli Petrochemical Co and Meinian Onehealth Healthcare, you can compare the effects of market volatilities on Hengli Petrochemical and Meinian Onehealth 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 Meinian Onehealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengli Petrochemical and Meinian Onehealth.
Diversification Opportunities for Hengli Petrochemical and Meinian Onehealth
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hengli and Meinian is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hengli Petrochemical Co and Meinian Onehealth Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meinian Onehealth 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 Meinian Onehealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meinian Onehealth has no effect on the direction of Hengli Petrochemical i.e., Hengli Petrochemical and Meinian Onehealth go up and down completely randomly.
Pair Corralation between Hengli Petrochemical and Meinian Onehealth
Assuming the 90 days trading horizon Hengli Petrochemical Co is expected to generate 0.5 times more return on investment than Meinian Onehealth. However, Hengli Petrochemical Co is 1.98 times less risky than Meinian Onehealth. It trades about 0.02 of its potential returns per unit of risk. Meinian Onehealth Healthcare is currently generating about -0.12 per unit of risk. If you would invest 1,494 in Hengli Petrochemical Co on November 2, 2024 and sell it today you would earn a total of 4.00 from holding Hengli Petrochemical Co or generate 0.27% 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. Meinian Onehealth Healthcare
Performance |
| Timeline |
| Hengli Petrochemical |
| Meinian Onehealth |
Hengli Petrochemical and Meinian Onehealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengli Petrochemical and Meinian Onehealth
The main advantage of trading using opposite Hengli Petrochemical and Meinian Onehealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengli Petrochemical position performs unexpectedly, Meinian Onehealth 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 Meinian Onehealth will offset losses from the drop in Meinian Onehealth's long position.The idea behind Hengli Petrochemical Co and Meinian Onehealth Healthcare 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.
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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