Correlation Between Shantui Construction and Linzhou Heavy
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By analyzing existing cross correlation between Shantui Construction Machinery and Linzhou Heavy Machinery, you can compare the effects of market volatilities on Shantui Construction and Linzhou Heavy 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 Shantui Construction with a short position of Linzhou Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shantui Construction and Linzhou Heavy.
Diversification Opportunities for Shantui Construction and Linzhou Heavy
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shantui and Linzhou is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Shantui Construction Machinery and Linzhou Heavy Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linzhou Heavy Machinery and Shantui Construction 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 Shantui Construction Machinery are associated (or correlated) with Linzhou Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linzhou Heavy Machinery has no effect on the direction of Shantui Construction i.e., Shantui Construction and Linzhou Heavy go up and down completely randomly.
Pair Corralation between Shantui Construction and Linzhou Heavy
Assuming the 90 days trading horizon Shantui Construction Machinery is expected to under-perform the Linzhou Heavy. But the stock apears to be less risky and, when comparing its historical volatility, Shantui Construction Machinery is 1.89 times less risky than Linzhou Heavy. The stock trades about -0.32 of its potential returns per unit of risk. The Linzhou Heavy Machinery is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 393.00 in Linzhou Heavy Machinery on September 28, 2024 and sell it today you would earn a total of 0.00 from holding Linzhou Heavy Machinery or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shantui Construction Machinery vs. Linzhou Heavy Machinery
Performance |
| Timeline |
| Shantui Construction |
| Linzhou Heavy Machinery |
Shantui Construction and Linzhou Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shantui Construction and Linzhou Heavy
The main advantage of trading using opposite Shantui Construction and Linzhou Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shantui Construction position performs unexpectedly, Linzhou Heavy 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 Linzhou Heavy will offset losses from the drop in Linzhou Heavy's long position.| Shantui Construction vs. ZYF Lopsking Aluminum | Shantui Construction vs. Western Metal Materials | Shantui Construction vs. Healthcare Co | Shantui Construction vs. Anhui Transport Consulting |
| Linzhou Heavy vs. Bank of China | Linzhou Heavy vs. Kweichow Moutai Co | Linzhou Heavy vs. PetroChina Co Ltd | Linzhou Heavy vs. Bank of Communications |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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