Correlation Between HengFeng Information and China CYTS

Can any of the company-specific risk be diversified away by investing in both HengFeng Information and China CYTS 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 HengFeng Information and China CYTS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HengFeng Information Technology and China CYTS Tours, you can compare the effects of market volatilities on HengFeng Information and China CYTS 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 HengFeng Information with a short position of China CYTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of HengFeng Information and China CYTS.

Diversification Opportunities for HengFeng Information and China CYTS

0.46

Correlation Coefficient

HengFeng Information  China CYTS

Very weak diversification

The 3 months correlation between HengFeng and China is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding HengFeng Information Technolog and China CYTS Tours in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China CYTS Tours and HengFeng 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 HengFeng Information Technology are associated (or correlated) with China CYTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China CYTS Tours has no effect on the direction of HengFeng Information i.e., HengFeng Information and China CYTS go up and down completely randomly.

Pair Corralation between HengFeng Information and China CYTS

Assuming the 90 days trading horizon HengFeng Information Technology is expected to generate 3.15 times more return on investment than China CYTS. However, HengFeng Information is 3.15 times more volatile than China CYTS Tours. It trades about 0.09 of its potential returns per unit of risk. China CYTS Tours is currently generating about 0.1 per unit of risk. If you would invest  1,194  in HengFeng Information Technology on December 25, 2024 and sell it today you would earn a total of  229.00  from holding HengFeng Information Technology or generate 19.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

HengFeng Information Technolog  vs.  China CYTS Tours

HengFeng Information

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HengFeng Information Technology are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, HengFeng Information sustained solid returns over the last few months and may actually be approaching a breakup point.

China CYTS Tours

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in China CYTS Tours are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, China CYTS may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with HengFeng Information and China CYTS

The main advantage of trading using opposite HengFeng Information and China CYTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HengFeng Information position performs unexpectedly, China CYTS 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 China CYTS will offset losses from the drop in China CYTS's long position.

The idea behind HengFeng Information Technology and China CYTS Tours 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.