Correlation Between Wuhan Xianglong and Hengdian Entertainment
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By analyzing existing cross correlation between Wuhan Xianglong Power and Hengdian Entertainment Co, you can compare the effects of market volatilities on Wuhan Xianglong 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 Wuhan Xianglong with a short position of Hengdian Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Xianglong and Hengdian Entertainment.
Diversification Opportunities for Wuhan Xianglong and Hengdian Entertainment
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wuhan and Hengdian is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Xianglong Power and Hengdian Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengdian Entertainment and Wuhan Xianglong 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 Wuhan Xianglong Power 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 Wuhan Xianglong i.e., Wuhan Xianglong and Hengdian Entertainment go up and down completely randomly.
Pair Corralation between Wuhan Xianglong and Hengdian Entertainment
Assuming the 90 days trading horizon Wuhan Xianglong Power is expected to generate 1.12 times more return on investment than Hengdian Entertainment. However, Wuhan Xianglong is 1.12 times more volatile than Hengdian Entertainment Co. It trades about 0.04 of its potential returns per unit of risk. Hengdian Entertainment Co is currently generating about 0.02 per unit of risk. If you would invest 853.00 in Wuhan Xianglong Power on September 12, 2024 and sell it today you would earn a total of 317.00 from holding Wuhan Xianglong Power or generate 37.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Xianglong Power vs. Hengdian Entertainment Co
Performance |
| Timeline |
| Wuhan Xianglong Power |
| Hengdian Entertainment |
Wuhan Xianglong and Hengdian Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Xianglong and Hengdian Entertainment
The main advantage of trading using opposite Wuhan Xianglong and Hengdian Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Xianglong 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.| Wuhan Xianglong vs. Chengtun Mining Group | Wuhan Xianglong vs. Gem Year Industrial Co | Wuhan Xianglong vs. Industrial Bank Co | Wuhan Xianglong vs. China Nonferrous Metal |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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