Correlation Between Hengdian Entertainment and Chengdu Xingrong
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By analyzing existing cross correlation between Hengdian Entertainment Co and Chengdu Xingrong Investment, you can compare the effects of market volatilities on Hengdian Entertainment and Chengdu Xingrong 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 Hengdian Entertainment with a short position of Chengdu Xingrong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengdian Entertainment and Chengdu Xingrong.
Diversification Opportunities for Hengdian Entertainment and Chengdu Xingrong
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hengdian and Chengdu is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hengdian Entertainment Co and Chengdu Xingrong Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Xingrong Inv and Hengdian Entertainment 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 Hengdian Entertainment Co are associated (or correlated) with Chengdu Xingrong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Xingrong Inv has no effect on the direction of Hengdian Entertainment i.e., Hengdian Entertainment and Chengdu Xingrong go up and down completely randomly.
Pair Corralation between Hengdian Entertainment and Chengdu Xingrong
Assuming the 90 days trading horizon Hengdian Entertainment Co is expected to generate 3.06 times more return on investment than Chengdu Xingrong. However, Hengdian Entertainment is 3.06 times more volatile than Chengdu Xingrong Investment. It trades about 0.22 of its potential returns per unit of risk. Chengdu Xingrong Investment is currently generating about -0.16 per unit of risk. If you would invest 1,349 in Hengdian Entertainment Co on September 13, 2024 and sell it today you would earn a total of 274.00 from holding Hengdian Entertainment Co or generate 20.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengdian Entertainment Co vs. Chengdu Xingrong Investment
Performance |
| Timeline |
| Hengdian Entertainment |
| Chengdu Xingrong Inv |
Hengdian Entertainment and Chengdu Xingrong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengdian Entertainment and Chengdu Xingrong
The main advantage of trading using opposite Hengdian Entertainment and Chengdu Xingrong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengdian Entertainment position performs unexpectedly, Chengdu Xingrong 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 Chengdu Xingrong will offset losses from the drop in Chengdu Xingrong's long position.| Hengdian Entertainment vs. Industrial and Commercial | Hengdian Entertainment vs. China Construction Bank | Hengdian Entertainment vs. Agricultural Bank of | Hengdian Entertainment vs. Bank of China |
| Chengdu Xingrong vs. Biwin Storage Technology | Chengdu Xingrong vs. PetroChina Co Ltd | Chengdu Xingrong vs. Industrial and Commercial | Chengdu Xingrong vs. China Construction Bank |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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