Correlation Between Henan Shuanghui and Changchun Engley

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Can any of the company-specific risk be diversified away by investing in both Henan Shuanghui and Changchun Engley at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Henan Shuanghui and Changchun Engley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henan Shuanghui Investment and Changchun Engley Automobile, you can compare the effects of market volatilities on Henan Shuanghui and Changchun Engley 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 Henan Shuanghui with a short position of Changchun Engley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henan Shuanghui and Changchun Engley.

Diversification Opportunities for Henan Shuanghui and Changchun Engley

HenanChangchunDiversified AwayHenanChangchunDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Henan and Changchun is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Henan Shuanghui Investment and Changchun Engley Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun Engley Aut and Henan Shuanghui 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 Henan Shuanghui Investment are associated (or correlated) with Changchun Engley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun Engley Aut has no effect on the direction of Henan Shuanghui i.e., Henan Shuanghui and Changchun Engley go up and down completely randomly.

Pair Corralation between Henan Shuanghui and Changchun Engley

Assuming the 90 days trading horizon Henan Shuanghui Investment is expected to generate 0.53 times more return on investment than Changchun Engley. However, Henan Shuanghui Investment is 1.89 times less risky than Changchun Engley. It trades about 0.05 of its potential returns per unit of risk. Changchun Engley Automobile is currently generating about -0.07 per unit of risk. If you would invest  2,482  in Henan Shuanghui Investment on November 20, 2024 and sell it today you would earn a total of  84.00  from holding Henan Shuanghui Investment or generate 3.38% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Henan Shuanghui Investment  vs.  Changchun Engley Automobile

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-15-10-50
JavaScript chart by amCharts 3.21.15000895 601279
       Timeline  
Henan Shuanghui Inve 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Henan Shuanghui Investment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Henan Shuanghui is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2424.52525.52626.5
Changchun Engley Aut 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Changchun Engley Automobile has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3.43.63.844.24.44.6

Henan Shuanghui and Changchun Engley Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.83-2.87-1.91-0.950.00.931.92.873.834.8 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15000895 601279
       Returns  

Pair Trading with Henan Shuanghui and Changchun Engley

The main advantage of trading using opposite Henan Shuanghui and Changchun Engley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henan Shuanghui position performs unexpectedly, Changchun Engley 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 Changchun Engley will offset losses from the drop in Changchun Engley's long position.
The idea behind Henan Shuanghui Investment and Changchun Engley Automobile 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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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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