Correlation Between Shandong and Hunan Investment
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By analyzing existing cross correlation between Shandong Hi Speed RoadBridge and Hunan Investment Group, you can compare the effects of market volatilities on Shandong and Hunan Investment 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 Shandong with a short position of Hunan Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong and Hunan Investment.
Diversification Opportunities for Shandong and Hunan Investment
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Hunan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Hi Speed RoadBridge and Hunan Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Investment and Shandong 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 Shandong Hi Speed RoadBridge are associated (or correlated) with Hunan Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Investment has no effect on the direction of Shandong i.e., Shandong and Hunan Investment go up and down completely randomly.
Pair Corralation between Shandong and Hunan Investment
Assuming the 90 days trading horizon Shandong Hi Speed RoadBridge is expected to generate 0.95 times more return on investment than Hunan Investment. However, Shandong Hi Speed RoadBridge is 1.05 times less risky than Hunan Investment. It trades about 0.01 of its potential returns per unit of risk. Hunan Investment Group is currently generating about -0.02 per unit of risk. If you would invest 574.00 in Shandong Hi Speed RoadBridge on November 28, 2024 and sell it today you would earn a total of 1.00 from holding Shandong Hi Speed RoadBridge or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.12% |
| Values | Daily Returns |
Shandong Hi Speed RoadBridge vs. Hunan Investment Group
Performance |
| Timeline |
| Shandong Hi Speed |
| Hunan Investment |
Shandong and Hunan Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong and Hunan Investment
The main advantage of trading using opposite Shandong and Hunan Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong position performs unexpectedly, Hunan Investment 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 Hunan Investment will offset losses from the drop in Hunan Investment's long position.| Shandong vs. Soochow Suzhou Industrial | Shandong vs. Western Metal Materials | Shandong vs. CICC Fund Management | Shandong vs. Universal Scientific Industrial |
| Hunan Investment vs. Shandong Sinoglory Health | Hunan Investment vs. Jointo Energy Investment | Hunan Investment vs. Dezhan HealthCare Co | Hunan Investment vs. SSAW Hotels Resorts |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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