Correlation Between Heilongjiang Transport and Dook Media

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

Diversification Opportunities for Heilongjiang Transport and Dook Media

HeilongjiangDookDiversified AwayHeilongjiangDookDiversified Away100%
0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Heilongjiang and Dook is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Heilongjiang Transport Develop and Dook Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dook Media Group 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 Dook Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dook Media Group has no effect on the direction of Heilongjiang Transport i.e., Heilongjiang Transport and Dook Media go up and down completely randomly.

Pair Corralation between Heilongjiang Transport and Dook Media

Assuming the 90 days trading horizon Heilongjiang Transport is expected to generate 1.3 times less return on investment than Dook Media. But when comparing it to its historical volatility, Heilongjiang Transport Development is 1.58 times less risky than Dook Media. It trades about 0.23 of its potential returns per unit of risk. Dook Media Group is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  793.00  in Dook Media Group on September 16, 2024 and sell it today you would earn a total of  423.00  from holding Dook Media Group or generate 53.34% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Heilongjiang Transport Develop  vs.  Dook Media Group

 Performance 
JavaScript chart by amCharts 3.21.15OctNov 010203040
JavaScript chart by amCharts 3.21.15601188 301025
       Timeline  
Heilongjiang Transport 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Heilongjiang Transport Development are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Heilongjiang Transport sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec33.23.43.63.844.24.4
Dook Media Group 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Dook Media Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Dook Media sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec8910111213

Heilongjiang Transport and Dook Media Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-8.36-6.26-4.16-2.060.02.234.546.849.1511.46 0.0200.0250.0300.0350.0400.0450.050
JavaScript chart by amCharts 3.21.15601188 301025
       Returns  

Pair Trading with Heilongjiang Transport and Dook Media

The main advantage of trading using opposite Heilongjiang Transport and Dook Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heilongjiang Transport position performs unexpectedly, Dook Media 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 Dook Media will offset losses from the drop in Dook Media's long position.
The idea behind Heilongjiang Transport Development and Dook Media Group 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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