Correlation Between Peoples Insurance and Hengdian Entertainment
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By analyzing existing cross correlation between Peoples Insurance of and Hengdian Entertainment Co, you can compare the effects of market volatilities on Peoples Insurance 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 Peoples Insurance with a short position of Hengdian Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Insurance and Hengdian Entertainment.
Diversification Opportunities for Peoples Insurance and Hengdian Entertainment
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Peoples and Hengdian is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Insurance of and Hengdian Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengdian Entertainment and Peoples Insurance 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 Peoples Insurance of 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 Peoples Insurance i.e., Peoples Insurance and Hengdian Entertainment go up and down completely randomly.
Pair Corralation between Peoples Insurance and Hengdian Entertainment
Assuming the 90 days trading horizon Peoples Insurance of is expected to under-perform the Hengdian Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Peoples Insurance of is 1.81 times less risky than Hengdian Entertainment. The stock trades about -0.01 of its potential returns per unit of risk. The Hengdian Entertainment Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,423 in Hengdian Entertainment Co on November 3, 2024 and sell it today you would earn a total of 52.00 from holding Hengdian Entertainment Co or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peoples Insurance of vs. Hengdian Entertainment Co
Performance |
| Timeline |
| Peoples Insurance |
| Hengdian Entertainment |
Peoples Insurance and Hengdian Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peoples Insurance and Hengdian Entertainment
The main advantage of trading using opposite Peoples Insurance and Hengdian Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Insurance 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.| Peoples Insurance vs. CIMC Vehicles Co | Peoples Insurance vs. Guocheng Mining Co | Peoples Insurance vs. Iat Automobile Technology | Peoples Insurance vs. Shengda Mining Co |
| Hengdian Entertainment vs. China World Trade | Hengdian Entertainment vs. Shandong Longquan Pipeline | Hengdian Entertainment vs. Linewell Software Co | Hengdian Entertainment vs. Guangdong Jingyi 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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