Correlation Between Emdoor Information and Hengli Petrochemical
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By analyzing existing cross correlation between Emdoor Information Co and Hengli Petrochemical Co, you can compare the effects of market volatilities on Emdoor Information and Hengli Petrochemical 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 Emdoor Information with a short position of Hengli Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emdoor Information and Hengli Petrochemical.
Diversification Opportunities for Emdoor Information and Hengli Petrochemical
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Emdoor and Hengli is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Emdoor Information Co and Hengli Petrochemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Petrochemical and Emdoor Information 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 Emdoor Information Co are associated (or correlated) with Hengli Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengli Petrochemical has no effect on the direction of Emdoor Information i.e., Emdoor Information and Hengli Petrochemical go up and down completely randomly.
Pair Corralation between Emdoor Information and Hengli Petrochemical
Assuming the 90 days trading horizon Emdoor Information Co is expected to generate 3.98 times more return on investment than Hengli Petrochemical. However, Emdoor Information is 3.98 times more volatile than Hengli Petrochemical Co. It trades about 0.13 of its potential returns per unit of risk. Hengli Petrochemical Co is currently generating about 0.36 per unit of risk. If you would invest 4,712 in Emdoor Information Co on September 26, 2024 and sell it today you would earn a total of 573.00 from holding Emdoor Information Co or generate 12.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Emdoor Information Co vs. Hengli Petrochemical Co
Performance |
Timeline |
Emdoor Information |
Hengli Petrochemical |
Emdoor Information and Hengli Petrochemical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Emdoor Information and Hengli Petrochemical
The main advantage of trading using opposite Emdoor Information and Hengli Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emdoor Information position performs unexpectedly, Hengli Petrochemical 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 Hengli Petrochemical will offset losses from the drop in Hengli Petrochemical's long position.Emdoor Information vs. Bank of China | Emdoor Information vs. Kweichow Moutai Co | Emdoor Information vs. PetroChina Co Ltd | Emdoor Information vs. Bank of Communications |
Hengli Petrochemical vs. Zijin Mining Group | Hengli Petrochemical vs. Wanhua Chemical Group | Hengli Petrochemical vs. Baoshan Iron Steel | Hengli Petrochemical vs. Shandong Gold Mining |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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