Correlation Between Chengdu B and Hengdian Entertainment
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By analyzing existing cross correlation between Chengdu B ray Media and Hengdian Entertainment Co, you can compare the effects of market volatilities on Chengdu B 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 Chengdu B with a short position of Hengdian Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu B and Hengdian Entertainment.
Diversification Opportunities for Chengdu B and Hengdian Entertainment
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chengdu and Hengdian is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu B ray Media and Hengdian Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengdian Entertainment and Chengdu B 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 Chengdu B ray Media 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 Chengdu B i.e., Chengdu B and Hengdian Entertainment go up and down completely randomly.
Pair Corralation between Chengdu B and Hengdian Entertainment
Assuming the 90 days trading horizon Chengdu B is expected to generate 1.1 times less return on investment than Hengdian Entertainment. But when comparing it to its historical volatility, Chengdu B ray Media is 1.2 times less risky than Hengdian Entertainment. It trades about 0.19 of its potential returns per unit of risk. Hengdian Entertainment Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,040 in Hengdian Entertainment Co on September 2, 2024 and sell it today you would earn a total of 447.00 from holding Hengdian Entertainment Co or generate 42.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu B ray Media vs. Hengdian Entertainment Co
Performance |
| Timeline |
| Chengdu B ray |
| Hengdian Entertainment |
Chengdu B and Hengdian Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu B and Hengdian Entertainment
The main advantage of trading using opposite Chengdu B and Hengdian Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu B 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.| Chengdu B vs. Kunshan Guoli Electronic | Chengdu B vs. Chison Medical Technologies | Chengdu B vs. Xian International Medical | Chengdu B vs. Shenzhen Glory Medical |
| Hengdian Entertainment vs. Lutian Machinery Co | Hengdian Entertainment vs. China Longyuan Power | Hengdian Entertainment vs. PetroChina Co Ltd | Hengdian Entertainment vs. Bank of China |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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