Correlation Between Heilongjiang Publishing and Der International

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

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

Diversification Opportunities for Heilongjiang Publishing and Der International

0.91

Correlation Coefficient

Heilongjiang Publishing  Der International

Almost no diversification

The 3 months correlation between Heilongjiang and Der is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Heilongjiang Publishing Media and Der International Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Der International Home and Heilongjiang Publishing 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 Publishing Media are associated (or correlated) with Der International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Der International Home has no effect on the direction of Heilongjiang Publishing i.e., Heilongjiang Publishing and Der International go up and down completely randomly.

Pair Corralation between Heilongjiang Publishing and Der International

Assuming the 90 days trading horizon Heilongjiang Publishing Media is expected to under-perform the Der International. But the stock apears to be less risky and, when comparing its historical volatility, Heilongjiang Publishing Media is 1.48 times less risky than Der International. The stock trades about -0.28 of its potential returns per unit of risk. The Der International Home is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  392.00  in Der International Home on December 4, 2024 and sell it today you would earn a total of  40.00  from holding Der International Home or generate 10.2% return on investment over 90 days.

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

Heilongjiang Publishing Media  vs.  Der International Home

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.

Der International Home

Risk-Adjusted Performance

Very Weak

Over the last 90 days Der International Home 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 Publishing and Der International

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

The idea behind Heilongjiang Publishing Media and Der International Home 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.