Correlation Between China Vanke and Hengdian Entertainment
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By analyzing existing cross correlation between China Vanke Co and Hengdian Entertainment Co, you can compare the effects of market volatilities on China Vanke and Hengdian Entertainment 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 China Vanke with a short position of Hengdian Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Vanke and Hengdian Entertainment.
Diversification Opportunities for China Vanke and Hengdian Entertainment
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Hengdian is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding China Vanke Co and Hengdian Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengdian Entertainment and China Vanke 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 China Vanke Co are associated (or correlated) with Hengdian Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengdian Entertainment has no effect on the direction of China Vanke i.e., China Vanke and Hengdian Entertainment go up and down completely randomly.
Pair Corralation between China Vanke and Hengdian Entertainment
Assuming the 90 days trading horizon China Vanke is expected to generate 1.52 times less return on investment than Hengdian Entertainment. But when comparing it to its historical volatility, China Vanke Co is 1.08 times less risky than Hengdian Entertainment. It trades about 0.17 of its potential returns per unit of risk. Hengdian Entertainment Co is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 994.00 in Hengdian Entertainment Co on September 13, 2024 and sell it today you would earn a total of 629.00 from holding Hengdian Entertainment Co or generate 63.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
China Vanke Co vs. Hengdian Entertainment Co
Performance |
Timeline |
China Vanke |
Hengdian Entertainment |
China Vanke and Hengdian Entertainment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Vanke and Hengdian Entertainment
The main advantage of trading using opposite China Vanke and Hengdian Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Vanke position performs unexpectedly, Hengdian Entertainment 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 Hengdian Entertainment will offset losses from the drop in Hengdian Entertainment's long position.China Vanke vs. Haima Automobile Group | China Vanke vs. Shanghai Rendu Biotechnology | China Vanke vs. Shenzhen Bioeasy Biotechnology | China Vanke vs. Anhui Jianghuai Automobile |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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