Correlation Between Zhejiang Daily and Hengdian Entertainment
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By analyzing existing cross correlation between Zhejiang Daily Media and Hengdian Entertainment Co, you can compare the effects of market volatilities on Zhejiang Daily 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 Zhejiang Daily with a short position of Hengdian Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Daily and Hengdian Entertainment.
Diversification Opportunities for Zhejiang Daily and Hengdian Entertainment
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Hengdian is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Daily Media and Hengdian Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengdian Entertainment and Zhejiang Daily 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 Zhejiang Daily Media 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 Zhejiang Daily i.e., Zhejiang Daily and Hengdian Entertainment go up and down completely randomly.
Pair Corralation between Zhejiang Daily and Hengdian Entertainment
Assuming the 90 days trading horizon Zhejiang Daily is expected to generate 1.43 times less return on investment than Hengdian Entertainment. But when comparing it to its historical volatility, Zhejiang Daily Media is 1.3 times less risky than Hengdian Entertainment. It trades about 0.19 of its potential returns per unit of risk. Hengdian Entertainment Co is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 985.00 in Hengdian Entertainment Co on September 23, 2024 and sell it today you would earn a total of 577.00 from holding Hengdian Entertainment Co or generate 58.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Zhejiang Daily Media vs. Hengdian Entertainment Co
Performance |
Timeline |
Zhejiang Daily Media |
Hengdian Entertainment |
Zhejiang Daily and Hengdian Entertainment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhejiang Daily and Hengdian Entertainment
The main advantage of trading using opposite Zhejiang Daily and Hengdian Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Daily 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.Zhejiang Daily vs. Agricultural Bank of | ||
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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