Correlation Between Shandong and Chengdu Xinzhu
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By analyzing existing cross correlation between Shandong Hi Speed RoadBridge and Chengdu Xinzhu RoadBridge, you can compare the effects of market volatilities on Shandong and Chengdu Xinzhu 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 Chengdu Xinzhu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong and Chengdu Xinzhu.
Diversification Opportunities for Shandong and Chengdu Xinzhu
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shandong and Chengdu is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Hi Speed RoadBridge and Chengdu Xinzhu RoadBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Xinzhu RoadBridge 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 Chengdu Xinzhu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Xinzhu RoadBridge has no effect on the direction of Shandong i.e., Shandong and Chengdu Xinzhu go up and down completely randomly.
Pair Corralation between Shandong and Chengdu Xinzhu
Assuming the 90 days trading horizon Shandong Hi Speed RoadBridge is expected to under-perform the Chengdu Xinzhu. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Hi Speed RoadBridge is 3.02 times less risky than Chengdu Xinzhu. The stock trades about -0.19 of its potential returns per unit of risk. The Chengdu Xinzhu RoadBridge is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 520.00 in Chengdu Xinzhu RoadBridge on November 3, 2024 and sell it today you would earn a total of 10.00 from holding Chengdu Xinzhu RoadBridge or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Hi Speed RoadBridge vs. Chengdu Xinzhu RoadBridge
Performance |
| Timeline |
| Shandong Hi Speed |
| Chengdu Xinzhu RoadBridge |
Shandong and Chengdu Xinzhu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong and Chengdu Xinzhu
The main advantage of trading using opposite Shandong and Chengdu Xinzhu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong position performs unexpectedly, Chengdu Xinzhu 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 Chengdu Xinzhu will offset losses from the drop in Chengdu Xinzhu's long position.| Shandong vs. Xinhua Winshare Publishing | Shandong vs. Hainan Mining Co | Shandong vs. Offcn Education Technology | Shandong vs. Zhengzhou Coal Mining |
| Chengdu Xinzhu vs. Tieling Newcity Investment | Chengdu Xinzhu vs. Cultural Investment Holdings | Chengdu Xinzhu vs. Anhui Jianghuai Automobile | Chengdu Xinzhu vs. Hubei Geoway 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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