Correlation Between Hengdian Entertainment and Sanxiang Advanced
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By analyzing existing cross correlation between Hengdian Entertainment Co and Sanxiang Advanced Materials, you can compare the effects of market volatilities on Hengdian Entertainment and Sanxiang 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 Sanxiang Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengdian Entertainment and Sanxiang Advanced.
Diversification Opportunities for Hengdian Entertainment and Sanxiang Advanced
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hengdian and Sanxiang is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hengdian Entertainment Co and Sanxiang Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanxiang Advanced 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 Sanxiang Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanxiang Advanced has no effect on the direction of Hengdian Entertainment i.e., Hengdian Entertainment and Sanxiang Advanced go up and down completely randomly.
Pair Corralation between Hengdian Entertainment and Sanxiang Advanced
Assuming the 90 days trading horizon Hengdian Entertainment Co is expected to generate 1.1 times more return on investment than Sanxiang Advanced. However, Hengdian Entertainment is 1.1 times more volatile than Sanxiang Advanced Materials. It trades about 0.18 of its potential returns per unit of risk. Sanxiang Advanced Materials is currently generating about -0.01 per unit of risk. If you would invest 1,269 in Hengdian Entertainment Co on September 1, 2024 and sell it today you would earn a total of 218.00 from holding Hengdian Entertainment Co or generate 17.18% 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. Sanxiang Advanced Materials
Performance |
| Timeline |
| Hengdian Entertainment |
| Sanxiang Advanced |
Hengdian Entertainment and Sanxiang Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengdian Entertainment and Sanxiang Advanced
The main advantage of trading using opposite Hengdian Entertainment and Sanxiang Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengdian Entertainment position performs unexpectedly, Sanxiang 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 Sanxiang Advanced will offset losses from the drop in Sanxiang Advanced's long position.| Hengdian Entertainment vs. Lutian Machinery Co | Hengdian Entertainment vs. China Longyuan Power | Hengdian Entertainment vs. PetroChina Co Ltd | Hengdian Entertainment vs. Bank of China |
| Sanxiang Advanced vs. Ligao Foods CoLtd | Sanxiang Advanced vs. Great Sun Foods Co | Sanxiang Advanced vs. Anji Foodstuff Co | Sanxiang Advanced vs. Hengdian Entertainment 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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