Correlation Between Hengdian Entertainment and Malion New
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By analyzing existing cross correlation between Hengdian Entertainment Co and Malion New Materials, you can compare the effects of market volatilities on Hengdian Entertainment and Malion New 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 Malion New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengdian Entertainment and Malion New.
Diversification Opportunities for Hengdian Entertainment and Malion New
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hengdian and Malion is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hengdian Entertainment Co and Malion New Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malion New Materials 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 Malion New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malion New Materials has no effect on the direction of Hengdian Entertainment i.e., Hengdian Entertainment and Malion New go up and down completely randomly.
Pair Corralation between Hengdian Entertainment and Malion New
Assuming the 90 days trading horizon Hengdian Entertainment Co is expected to generate 0.86 times more return on investment than Malion New. However, Hengdian Entertainment Co is 1.16 times less risky than Malion New. It trades about 0.18 of its potential returns per unit of risk. Malion New Materials is currently generating about 0.09 per unit of risk. If you would invest 1,178 in Hengdian Entertainment Co on August 25, 2024 and sell it today you would earn a total of 153.00 from holding Hengdian Entertainment Co or generate 12.99% 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. Malion New Materials
Performance |
| Timeline |
| Hengdian Entertainment |
| Malion New Materials |
Hengdian Entertainment and Malion New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengdian Entertainment and Malion New
The main advantage of trading using opposite Hengdian Entertainment and Malion New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengdian Entertainment position performs unexpectedly, Malion New 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 Malion New will offset losses from the drop in Malion New's long position.| Hengdian Entertainment vs. Industrial and Commercial | Hengdian Entertainment vs. Agricultural Bank of | Hengdian Entertainment vs. China Construction Bank | Hengdian Entertainment vs. Bank of China |
| Malion New vs. Sunny Loan Top | Malion New vs. Hunan Investment Group | Malion New vs. Tieling Newcity Investment | Malion New vs. Harbin Hatou Investment |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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