Correlation Between Hengdian Entertainment and Grinm Advanced
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By analyzing existing cross correlation between Hengdian Entertainment Co and Grinm Advanced Materials, you can compare the effects of market volatilities on Hengdian Entertainment and Grinm Advanced 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 Grinm Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengdian Entertainment and Grinm Advanced.
Diversification Opportunities for Hengdian Entertainment and Grinm Advanced
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hengdian and Grinm is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hengdian Entertainment Co and Grinm Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grinm Advanced 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 Grinm Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grinm Advanced Materials has no effect on the direction of Hengdian Entertainment i.e., Hengdian Entertainment and Grinm Advanced go up and down completely randomly.
Pair Corralation between Hengdian Entertainment and Grinm Advanced
Assuming the 90 days trading horizon Hengdian Entertainment is expected to generate 19.53 times less return on investment than Grinm Advanced. But when comparing it to its historical volatility, Hengdian Entertainment Co is 1.22 times less risky than Grinm Advanced. It trades about 0.01 of its potential returns per unit of risk. Grinm Advanced Materials is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,098 in Grinm Advanced Materials on September 3, 2024 and sell it today you would earn a total of 1,149 from holding Grinm Advanced Materials or generate 104.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengdian Entertainment Co vs. Grinm Advanced Materials
Performance |
| Timeline |
| Hengdian Entertainment |
| Grinm Advanced Materials |
Hengdian Entertainment and Grinm Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengdian Entertainment and Grinm Advanced
The main advantage of trading using opposite Hengdian Entertainment and Grinm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengdian Entertainment position performs unexpectedly, Grinm Advanced 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 Grinm Advanced will offset losses from the drop in Grinm Advanced's long position.| Hengdian Entertainment vs. Gansu Jiu Steel | Hengdian Entertainment vs. Ming Yang Smart | Hengdian Entertainment vs. Aba Chemicals Corp | Hengdian Entertainment vs. Loctek Ergonomic Technology |
| Grinm Advanced vs. Agricultural Bank of | Grinm Advanced vs. China Construction Bank | Grinm Advanced vs. Postal Savings Bank | Grinm Advanced vs. Bank of Communications |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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