Correlation Between Heilongjiang Transport and Heilongjiang Publishing

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

By analyzing existing cross correlation between Heilongjiang Transport Development and Heilongjiang Publishing Media, you can compare the effects of market volatilities on Heilongjiang Transport and Heilongjiang Publishing 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 Heilongjiang Transport with a short position of Heilongjiang Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heilongjiang Transport and Heilongjiang Publishing.

Diversification Opportunities for Heilongjiang Transport and Heilongjiang Publishing

0.98

Correlation Coefficient

Heilongjiang Transport  Heilongjiang Publishing

Almost no diversification

The 3 months correlation between Heilongjiang and Heilongjiang is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Heilongjiang Transport Develop and Heilongjiang Publishing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heilongjiang Publishing and Heilongjiang Transport 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 Heilongjiang Transport Development are associated (or correlated) with Heilongjiang Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heilongjiang Publishing has no effect on the direction of Heilongjiang Transport i.e., Heilongjiang Transport and Heilongjiang Publishing go up and down completely randomly.

Pair Corralation between Heilongjiang Transport and Heilongjiang Publishing

Assuming the 90 days trading horizon Heilongjiang Transport Development is expected to generate 0.7 times more return on investment than Heilongjiang Publishing. However, Heilongjiang Transport Development is 1.43 times less risky than Heilongjiang Publishing. It trades about -0.19 of its potential returns per unit of risk. Heilongjiang Publishing Media is currently generating about -0.17 per unit of risk. If you would invest  405.00  in Heilongjiang Transport Development on December 11, 2024 and sell it today you would lose (75.00) from holding Heilongjiang Transport Development or give up 18.52% of portfolio value over 90 days.

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

Heilongjiang Transport Develop  vs.  Heilongjiang Publishing Media

Heilongjiang Transport

Risk-Adjusted Performance

Very Weak

Over the last 90 days Heilongjiang Transport Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Heilongjiang Publishing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Heilongjiang Publishing Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Heilongjiang Transport and Heilongjiang Publishing

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

The idea behind Heilongjiang Transport Development and Heilongjiang Publishing Media 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.

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.