Correlation Between Hengdian Entertainment and Beijing Enlight
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By analyzing existing cross correlation between Hengdian Entertainment Co and Beijing Enlight Media, you can compare the effects of market volatilities on Hengdian Entertainment and Beijing Enlight 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 Beijing Enlight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengdian Entertainment and Beijing Enlight.
Diversification Opportunities for Hengdian Entertainment and Beijing Enlight
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hengdian and Beijing is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hengdian Entertainment Co and Beijing Enlight Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Enlight Media 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 Beijing Enlight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Enlight Media has no effect on the direction of Hengdian Entertainment i.e., Hengdian Entertainment and Beijing Enlight go up and down completely randomly.
Pair Corralation between Hengdian Entertainment and Beijing Enlight
Assuming the 90 days trading horizon Hengdian Entertainment is expected to generate 1.59 times less return on investment than Beijing Enlight. But when comparing it to its historical volatility, Hengdian Entertainment Co is 1.0 times less risky than Beijing Enlight. It trades about 0.02 of its potential returns per unit of risk. Beijing Enlight Media is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 792.00 in Beijing Enlight Media on November 2, 2024 and sell it today you would earn a total of 161.00 from holding Beijing Enlight Media or generate 20.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengdian Entertainment Co vs. Beijing Enlight Media
Performance |
| Timeline |
| Hengdian Entertainment |
| Beijing Enlight Media |
Hengdian Entertainment and Beijing Enlight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengdian Entertainment and Beijing Enlight
The main advantage of trading using opposite Hengdian Entertainment and Beijing Enlight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengdian Entertainment position performs unexpectedly, Beijing Enlight 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 Beijing Enlight will offset losses from the drop in Beijing Enlight'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 |
| Beijing Enlight vs. Anhui Tongguan Copper | Beijing Enlight vs. Holitech Technology Co | Beijing Enlight vs. Zhengzhou Coal Mining | Beijing Enlight vs. Jinhe Biotechnology 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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