Correlation Between Metro Investment and Hengdian Entertainment
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By analyzing existing cross correlation between Metro Investment Development and Hengdian Entertainment Co, you can compare the effects of market volatilities on Metro Investment and Hengdian Entertainment 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 Metro Investment with a short position of Hengdian Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Investment and Hengdian Entertainment.
Diversification Opportunities for Metro Investment and Hengdian Entertainment
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Metro and Hengdian is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Metro Investment Development and Hengdian Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengdian Entertainment and Metro Investment 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 Metro Investment Development are associated (or correlated) with Hengdian Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengdian Entertainment has no effect on the direction of Metro Investment i.e., Metro Investment and Hengdian Entertainment go up and down completely randomly.
Pair Corralation between Metro Investment and Hengdian Entertainment
Assuming the 90 days trading horizon Metro Investment Development is expected to generate 1.09 times more return on investment than Hengdian Entertainment. However, Metro Investment is 1.09 times more volatile than Hengdian Entertainment Co. It trades about 0.02 of its potential returns per unit of risk. Hengdian Entertainment Co is currently generating about 0.01 per unit of risk. If you would invest 454.00 in Metro Investment Development on September 4, 2024 and sell it today you would earn a total of 13.00 from holding Metro Investment Development or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro Investment Development vs. Hengdian Entertainment Co
Performance |
| Timeline |
| Metro Investment Dev |
| Hengdian Entertainment |
Metro Investment and Hengdian Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Investment and Hengdian Entertainment
The main advantage of trading using opposite Metro Investment and Hengdian Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Investment position performs unexpectedly, Hengdian Entertainment 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 Hengdian Entertainment will offset losses from the drop in Hengdian Entertainment's long position.| Metro Investment vs. Bengang Steel Plates | Metro Investment vs. Guangdong Liantai Environmental | Metro Investment vs. Shenzhen MYS Environmental | Metro Investment vs. Anhui Fuhuang Steel |
| Hengdian Entertainment vs. China State Construction | Hengdian Entertainment vs. Poly Real Estate | Hengdian Entertainment vs. China Vanke Co | Hengdian Entertainment vs. China Merchants Shekou |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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