Correlation Between Hengdian Entertainment and Threes Company
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By analyzing existing cross correlation between Hengdian Entertainment Co and Threes Company Media, you can compare the effects of market volatilities on Hengdian Entertainment and Threes Company 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 Threes Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengdian Entertainment and Threes Company.
Diversification Opportunities for Hengdian Entertainment and Threes Company
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hengdian and Threes is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hengdian Entertainment Co and Threes Company Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Threes Company 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 Threes Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Threes Company has no effect on the direction of Hengdian Entertainment i.e., Hengdian Entertainment and Threes Company go up and down completely randomly.
Pair Corralation between Hengdian Entertainment and Threes Company
Assuming the 90 days trading horizon Hengdian Entertainment Co is expected to generate 2.13 times more return on investment than Threes Company. However, Hengdian Entertainment is 2.13 times more volatile than Threes Company Media. It trades about 0.04 of its potential returns per unit of risk. Threes Company Media is currently generating about -0.18 per unit of risk. If you would invest 1,328 in Hengdian Entertainment Co on December 1, 2024 and sell it today you would earn a total of 16.00 from holding Hengdian Entertainment Co or generate 1.2% 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. Threes Company Media
Performance |
| Timeline |
| Hengdian Entertainment |
| Threes Company |
Hengdian Entertainment and Threes Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengdian Entertainment and Threes Company
The main advantage of trading using opposite Hengdian Entertainment and Threes Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengdian Entertainment position performs unexpectedly, Threes Company 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 Threes Company will offset losses from the drop in Threes Company's long position.| Hengdian Entertainment vs. Jiangsu Jinling Sports | Hengdian Entertainment vs. Tibet Huayu Mining | Hengdian Entertainment vs. Zijin Mining Group | Hengdian Entertainment vs. Western Metal Materials |
| Threes Company vs. Anhui Transport Consulting | Threes Company vs. Sportsoul Co Ltd | Threes Company vs. Advanced Technology Materials | Threes Company vs. Kangxin New Materials |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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