Correlation Between Hengdian Entertainment and Mingchen Health
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By analyzing existing cross correlation between Hengdian Entertainment Co and Mingchen Health Co, you can compare the effects of market volatilities on Hengdian Entertainment and Mingchen Health 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 Mingchen Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengdian Entertainment and Mingchen Health.
Diversification Opportunities for Hengdian Entertainment and Mingchen Health
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hengdian and Mingchen is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hengdian Entertainment Co and Mingchen Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mingchen Health 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 Mingchen Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mingchen Health has no effect on the direction of Hengdian Entertainment i.e., Hengdian Entertainment and Mingchen Health go up and down completely randomly.
Pair Corralation between Hengdian Entertainment and Mingchen Health
Assuming the 90 days trading horizon Hengdian Entertainment Co is expected to under-perform the Mingchen Health. But the stock apears to be less risky and, when comparing its historical volatility, Hengdian Entertainment Co is 1.09 times less risky than Mingchen Health. The stock trades about -0.34 of its potential returns per unit of risk. The Mingchen Health Co is currently generating about -0.23 of returns per unit of risk over similar time horizon. If you would invest 1,920 in Mingchen Health Co on October 17, 2024 and sell it today you would lose (372.00) from holding Mingchen Health Co or give up 19.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengdian Entertainment Co vs. Mingchen Health Co
Performance |
| Timeline |
| Hengdian Entertainment |
| Mingchen Health |
Hengdian Entertainment and Mingchen Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengdian Entertainment and Mingchen Health
The main advantage of trading using opposite Hengdian Entertainment and Mingchen Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengdian Entertainment position performs unexpectedly, Mingchen Health 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 Mingchen Health will offset losses from the drop in Mingchen Health's long position.The idea behind Hengdian Entertainment Co and Mingchen Health Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Mingchen Health vs. Shanghai Action Education | Mingchen Health vs. Wasu Media Holding | Mingchen Health vs. Xinhua Winshare Publishing | Mingchen Health vs. Hengdian Entertainment Co |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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