Correlation Between China Publishing and Hengdian Entertainment
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By analyzing existing cross correlation between China Publishing Media and Hengdian Entertainment Co, you can compare the effects of market volatilities on China Publishing 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 China Publishing with a short position of Hengdian Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Publishing and Hengdian Entertainment.
Diversification Opportunities for China Publishing and Hengdian Entertainment
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Hengdian is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding China Publishing 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 China Publishing 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 China Publishing 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 China Publishing i.e., China Publishing and Hengdian Entertainment go up and down completely randomly.
Pair Corralation between China Publishing and Hengdian Entertainment
Assuming the 90 days trading horizon China Publishing Media is expected to under-perform the Hengdian Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, China Publishing Media is 1.5 times less risky than Hengdian Entertainment. The stock trades about -0.37 of its potential returns per unit of risk. The Hengdian Entertainment Co is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest 1,562 in Hengdian Entertainment Co on October 21, 2024 and sell it today you would lose (206.00) from holding Hengdian Entertainment Co or give up 13.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Publishing Media vs. Hengdian Entertainment Co
Performance |
| Timeline |
| China Publishing Media |
| Hengdian Entertainment |
China Publishing and Hengdian Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Publishing and Hengdian Entertainment
The main advantage of trading using opposite China Publishing and Hengdian Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Publishing 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.| China Publishing vs. Sportsoul Co Ltd | China Publishing vs. Hengdian Entertainment Co | China Publishing vs. Chengdu B ray Media | China Publishing vs. Thinkingdom Media Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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