Correlation Between Shantui Construction and Chengdu Kanghua
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By analyzing existing cross correlation between Shantui Construction Machinery and Chengdu Kanghua Biological, you can compare the effects of market volatilities on Shantui Construction and Chengdu Kanghua 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 Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shantui Construction and Chengdu Kanghua.
Diversification Opportunities for Shantui Construction and Chengdu Kanghua
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shantui and Chengdu is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Shantui Construction Machinery and Chengdu Kanghua Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Kanghua Biol 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 Chengdu Kanghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Kanghua Biol has no effect on the direction of Shantui Construction i.e., Shantui Construction and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between Shantui Construction and Chengdu Kanghua
Assuming the 90 days trading horizon Shantui Construction Machinery is expected to generate 1.19 times more return on investment than Chengdu Kanghua. However, Shantui Construction is 1.19 times more volatile than Chengdu Kanghua Biological. It trades about 0.39 of its potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about -0.21 per unit of risk. If you would invest 760.00 in Shantui Construction Machinery on August 25, 2024 and sell it today you would earn a total of 250.00 from holding Shantui Construction Machinery or generate 32.89% 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. Chengdu Kanghua Biological
Performance |
| Timeline |
| Shantui Construction |
| Chengdu Kanghua Biol |
Shantui Construction and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shantui Construction and Chengdu Kanghua
The main advantage of trading using opposite Shantui Construction and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shantui Construction position performs unexpectedly, Chengdu Kanghua 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 Kanghua will offset losses from the drop in Chengdu Kanghua's long position.| Shantui Construction vs. Chengdu Kanghua Biological | Shantui Construction vs. Beijing Wantai Biological | Shantui Construction vs. Suzhou Novoprotein Scientific | Shantui Construction vs. Aluminum Corp of |
| Chengdu Kanghua vs. Longmaster Information Tech | Chengdu Kanghua vs. Yonyou Auto Information | Chengdu Kanghua vs. Weichai Heavy Machinery | Chengdu Kanghua vs. Ningbo Construction Co |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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