Correlation Between Hengdian Entertainment and Hoshine Silicon
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By analyzing existing cross correlation between Hengdian Entertainment Co and Hoshine Silicon Ind, you can compare the effects of market volatilities on Hengdian Entertainment and Hoshine Silicon 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 Hoshine Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengdian Entertainment and Hoshine Silicon.
Diversification Opportunities for Hengdian Entertainment and Hoshine Silicon
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hengdian and Hoshine is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hengdian Entertainment Co and Hoshine Silicon Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoshine Silicon Ind 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 Hoshine Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoshine Silicon Ind has no effect on the direction of Hengdian Entertainment i.e., Hengdian Entertainment and Hoshine Silicon go up and down completely randomly.
Pair Corralation between Hengdian Entertainment and Hoshine Silicon
Assuming the 90 days trading horizon Hengdian Entertainment Co is expected to generate 1.39 times more return on investment than Hoshine Silicon. However, Hengdian Entertainment is 1.39 times more volatile than Hoshine Silicon Ind. It trades about 0.0 of its potential returns per unit of risk. Hoshine Silicon Ind is currently generating about -0.04 per unit of risk. If you would invest 1,441 in Hengdian Entertainment Co on October 16, 2024 and sell it today you would lose (216.00) from holding Hengdian Entertainment Co or give up 14.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengdian Entertainment Co vs. Hoshine Silicon Ind
Performance |
| Timeline |
| Hengdian Entertainment |
| Hoshine Silicon Ind |
Hengdian Entertainment and Hoshine Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengdian Entertainment and Hoshine Silicon
The main advantage of trading using opposite Hengdian Entertainment and Hoshine Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengdian Entertainment position performs unexpectedly, Hoshine Silicon 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 Hoshine Silicon will offset losses from the drop in Hoshine Silicon's long position.The idea behind Hengdian Entertainment Co and Hoshine Silicon Ind 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.
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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