Correlation Between Dongxing Sec and Hengli Industrial
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By analyzing existing cross correlation between Dongxing Sec Co and Hengli Industrial Development, you can compare the effects of market volatilities on Dongxing Sec and Hengli Industrial 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 Dongxing Sec with a short position of Hengli Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongxing Sec and Hengli Industrial.
Diversification Opportunities for Dongxing Sec and Hengli Industrial
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongxing and Hengli is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Dongxing Sec Co and Hengli Industrial Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Industrial and Dongxing Sec 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 Dongxing Sec Co are associated (or correlated) with Hengli Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengli Industrial has no effect on the direction of Dongxing Sec i.e., Dongxing Sec and Hengli Industrial go up and down completely randomly.
Pair Corralation between Dongxing Sec and Hengli Industrial
Assuming the 90 days trading horizon Dongxing Sec Co is expected to generate 0.62 times more return on investment than Hengli Industrial. However, Dongxing Sec Co is 1.61 times less risky than Hengli Industrial. It trades about 0.05 of its potential returns per unit of risk. Hengli Industrial Development is currently generating about -0.03 per unit of risk. If you would invest 791.00 in Dongxing Sec Co on September 28, 2024 and sell it today you would earn a total of 392.00 from holding Dongxing Sec Co or generate 49.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongxing Sec Co vs. Hengli Industrial Development
Performance |
| Timeline |
| Dongxing Sec |
| Hengli Industrial |
Dongxing Sec and Hengli Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongxing Sec and Hengli Industrial
The main advantage of trading using opposite Dongxing Sec and Hengli Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongxing Sec position performs unexpectedly, Hengli Industrial 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 Hengli Industrial will offset losses from the drop in Hengli Industrial's long position.| Dongxing Sec vs. Runjian Communication Co | Dongxing Sec vs. Fiberhome Telecommunication Technologies | Dongxing Sec vs. Nanjing Putian Telecommunications | Dongxing Sec vs. Penyao Environmental Protection |
| Hengli Industrial vs. China Life Insurance | Hengli Industrial vs. Cinda Securities Co | Hengli Industrial vs. Piotech Inc A | Hengli Industrial vs. Dongxing Sec Co |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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