Correlation Between Heilongjiang Publishing and Cinda Securities

Can any of the company-specific risk be diversified away by investing in both Heilongjiang Publishing and Cinda Securities 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 Cinda Securities 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 Cinda Securities Co, you can compare the effects of market volatilities on Heilongjiang Publishing and Cinda Securities 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 Cinda Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heilongjiang Publishing and Cinda Securities.

Diversification Opportunities for Heilongjiang Publishing and Cinda Securities

0.25

Correlation Coefficient

Heilongjiang Publishing  Cinda Securities

Modest diversification

The 3 months correlation between Heilongjiang and Cinda is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Heilongjiang Publishing Media and Cinda Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinda Securities 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 Cinda Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cinda Securities has no effect on the direction of Heilongjiang Publishing i.e., Heilongjiang Publishing and Cinda Securities go up and down completely randomly.

Pair Corralation between Heilongjiang Publishing and Cinda Securities

Assuming the 90 days trading horizon Heilongjiang Publishing Media is expected to under-perform the Cinda Securities. But the stock apears to be less risky and, when comparing its historical volatility, Heilongjiang Publishing Media is 1.91 times less risky than Cinda Securities. The stock trades about -0.31 of its potential returns per unit of risk. The Cinda Securities Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,406  in Cinda Securities Co on December 10, 2024 and sell it today you would earn a total of  207.00  from holding Cinda Securities Co or generate 14.72% return on investment over 90 days.

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

Heilongjiang Publishing Media  vs.  Cinda Securities Co

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.

Cinda Securities

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cinda Securities Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Cinda Securities is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Heilongjiang Publishing and Cinda Securities

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

The idea behind Heilongjiang Publishing Media and Cinda Securities Co 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..