Correlation Between Hengdian Entertainment and Xiandai Investment
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By analyzing existing cross correlation between Hengdian Entertainment Co and Xiandai Investment Co, you can compare the effects of market volatilities on Hengdian Entertainment and Xiandai Investment 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 Xiandai Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengdian Entertainment and Xiandai Investment.
Diversification Opportunities for Hengdian Entertainment and Xiandai Investment
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hengdian and Xiandai is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hengdian Entertainment Co and Xiandai Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiandai Investment 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 Xiandai Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiandai Investment has no effect on the direction of Hengdian Entertainment i.e., Hengdian Entertainment and Xiandai Investment go up and down completely randomly.
Pair Corralation between Hengdian Entertainment and Xiandai Investment
Assuming the 90 days trading horizon Hengdian Entertainment Co is expected to generate 2.46 times more return on investment than Xiandai Investment. However, Hengdian Entertainment is 2.46 times more volatile than Xiandai Investment Co. It trades about 0.0 of its potential returns per unit of risk. Xiandai Investment Co is currently generating about -0.22 per unit of risk. If you would invest 1,486 in Hengdian Entertainment Co on October 30, 2024 and sell it today you would lose (11.00) from holding Hengdian Entertainment Co or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengdian Entertainment Co vs. Xiandai Investment Co
Performance |
| Timeline |
| Hengdian Entertainment |
| Xiandai Investment |
Hengdian Entertainment and Xiandai Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengdian Entertainment and Xiandai Investment
The main advantage of trading using opposite Hengdian Entertainment and Xiandai Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengdian Entertainment position performs unexpectedly, Xiandai Investment 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 Xiandai Investment will offset losses from the drop in Xiandai Investment's long position.| Hengdian Entertainment vs. GRG Banking Equipment | Hengdian Entertainment vs. Tongling Nonferrous Metals | Hengdian Entertainment vs. Industrial Bank Co | Hengdian Entertainment vs. Panda Financial Holding |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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