Correlation Between Hengdian Entertainment and China World
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By analyzing existing cross correlation between Hengdian Entertainment Co and China World Trade, you can compare the effects of market volatilities on Hengdian Entertainment and China World 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 China World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengdian Entertainment and China World.
Diversification Opportunities for Hengdian Entertainment and China World
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hengdian and China is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hengdian Entertainment Co and China World Trade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China World Trade 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 China World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China World Trade has no effect on the direction of Hengdian Entertainment i.e., Hengdian Entertainment and China World go up and down completely randomly.
Pair Corralation between Hengdian Entertainment and China World
Assuming the 90 days trading horizon Hengdian Entertainment Co is expected to generate 2.47 times more return on investment than China World. However, Hengdian Entertainment is 2.47 times more volatile than China World Trade. It trades about 0.06 of its potential returns per unit of risk. China World Trade is currently generating about 0.1 per unit of risk. If you would invest 1,354 in Hengdian Entertainment Co on November 6, 2024 and sell it today you would earn a total of 121.00 from holding Hengdian Entertainment Co or generate 8.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengdian Entertainment Co vs. China World Trade
Performance |
| Timeline |
| Hengdian Entertainment |
| China World Trade |
Hengdian Entertainment and China World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengdian Entertainment and China World
The main advantage of trading using opposite Hengdian Entertainment and China World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengdian Entertainment position performs unexpectedly, China World 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 China World will offset losses from the drop in China World's long position.| Hengdian Entertainment vs. Zhengzhou Coal Mining | Hengdian Entertainment vs. Zhejiang Yongjin Metal | Hengdian Entertainment vs. Easyhome New Retail | Hengdian Entertainment vs. Zoy Home Furnishing |
| China World vs. Jiangsu Xinri E Vehicle | China World vs. Jilin OLED Material | China World vs. Guangzhou Automobile Group | China World vs. Gansu Huangtai Wine marketing |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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