Correlation Between Postal Savings and Hengdian Entertainment
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By analyzing existing cross correlation between Postal Savings Bank and Hengdian Entertainment Co, you can compare the effects of market volatilities on Postal Savings 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 Postal Savings with a short position of Hengdian Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Savings and Hengdian Entertainment.
Diversification Opportunities for Postal Savings and Hengdian Entertainment
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Postal and Hengdian is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Postal Savings Bank and Hengdian Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengdian Entertainment and Postal Savings 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 Postal Savings Bank 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 Postal Savings i.e., Postal Savings and Hengdian Entertainment go up and down completely randomly.
Pair Corralation between Postal Savings and Hengdian Entertainment
Assuming the 90 days trading horizon Postal Savings is expected to generate 5.2 times less return on investment than Hengdian Entertainment. But when comparing it to its historical volatility, Postal Savings Bank is 2.68 times less risky than Hengdian Entertainment. It trades about 0.04 of its potential returns per unit of risk. 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 |
Postal Savings Bank vs. Hengdian Entertainment Co
Performance |
| Timeline |
| Postal Savings Bank |
| Hengdian Entertainment |
Postal Savings and Hengdian Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postal Savings and Hengdian Entertainment
The main advantage of trading using opposite Postal Savings and Hengdian Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Savings 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.| Postal Savings vs. Chengtun Mining Group | Postal Savings vs. Malion New Materials | Postal Savings vs. Guocheng Mining Co | Postal Savings vs. Shanghai Yanpu Metal |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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