Correlation Between Hengdian Entertainment and Longxing Chemical
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By analyzing existing cross correlation between Hengdian Entertainment Co and Longxing Chemical Stock, you can compare the effects of market volatilities on Hengdian Entertainment and Longxing Chemical 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 Longxing Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengdian Entertainment and Longxing Chemical.
Diversification Opportunities for Hengdian Entertainment and Longxing Chemical
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hengdian and Longxing is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hengdian Entertainment Co and Longxing Chemical Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longxing Chemical Stock 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 Longxing Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longxing Chemical Stock has no effect on the direction of Hengdian Entertainment i.e., Hengdian Entertainment and Longxing Chemical go up and down completely randomly.
Pair Corralation between Hengdian Entertainment and Longxing Chemical
Assuming the 90 days trading horizon Hengdian Entertainment Co is expected to generate 1.22 times more return on investment than Longxing Chemical. However, Hengdian Entertainment is 1.22 times more volatile than Longxing Chemical Stock. It trades about 0.02 of its potential returns per unit of risk. Longxing Chemical Stock is currently generating about 0.01 per unit of risk. If you would invest 1,432 in Hengdian Entertainment Co on November 2, 2024 and sell it today you would earn a total of 43.00 from holding Hengdian Entertainment Co or generate 3.0% 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. Longxing Chemical Stock
Performance |
| Timeline |
| Hengdian Entertainment |
| Longxing Chemical Stock |
Hengdian Entertainment and Longxing Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengdian Entertainment and Longxing Chemical
The main advantage of trading using opposite Hengdian Entertainment and Longxing Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengdian Entertainment position performs unexpectedly, Longxing Chemical 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 Longxing Chemical will offset losses from the drop in Longxing Chemical's long position.| Hengdian Entertainment vs. PetroChina Co Ltd | Hengdian Entertainment vs. Industrial and Commercial | Hengdian Entertainment vs. China Petroleum Chemical | Hengdian Entertainment 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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