Correlation Between Northern United and Hengdian Entertainment
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By analyzing existing cross correlation between Northern United Publishing and Hengdian Entertainment Co, you can compare the effects of market volatilities on Northern United 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 Northern United with a short position of Hengdian Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern United and Hengdian Entertainment.
Diversification Opportunities for Northern United and Hengdian Entertainment
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Northern and Hengdian is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Northern United Publishing and Hengdian Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengdian Entertainment and Northern United 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 Northern United Publishing 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 Northern United i.e., Northern United and Hengdian Entertainment go up and down completely randomly.
Pair Corralation between Northern United and Hengdian Entertainment
Assuming the 90 days trading horizon Northern United Publishing is expected to generate 0.69 times more return on investment than Hengdian Entertainment. However, Northern United Publishing is 1.46 times less risky than Hengdian Entertainment. It trades about 0.1 of its potential returns per unit of risk. Hengdian Entertainment Co is currently generating about 0.05 per unit of risk. If you would invest 627.00 in Northern United Publishing on November 1, 2024 and sell it today you would earn a total of 25.00 from holding Northern United Publishing or generate 3.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern United Publishing vs. Hengdian Entertainment Co
Performance |
| Timeline |
| Northern United Publ |
| Hengdian Entertainment |
Northern United and Hengdian Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern United and Hengdian Entertainment
The main advantage of trading using opposite Northern United and Hengdian Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern United 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.| Northern United vs. China Eastern Airlines | Northern United vs. Cicc Fund Management | Northern United vs. Innovative Medical Management | Northern United vs. China Aluminum International |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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