Correlation Between Shantui Construction and Caihong Display
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By analyzing existing cross correlation between Shantui Construction Machinery and Caihong Display Devices, you can compare the effects of market volatilities on Shantui Construction and Caihong Display 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 Caihong Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shantui Construction and Caihong Display.
Diversification Opportunities for Shantui Construction and Caihong Display
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shantui and Caihong is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Shantui Construction Machinery and Caihong Display Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caihong Display Devices 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 Caihong Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caihong Display Devices has no effect on the direction of Shantui Construction i.e., Shantui Construction and Caihong Display go up and down completely randomly.
Pair Corralation between Shantui Construction and Caihong Display
Assuming the 90 days trading horizon Shantui Construction Machinery is expected to generate 1.05 times more return on investment than Caihong Display. However, Shantui Construction is 1.05 times more volatile than Caihong Display Devices. It trades about 0.08 of its potential returns per unit of risk. Caihong Display Devices is currently generating about 0.05 per unit of risk. If you would invest 424.00 in Shantui Construction Machinery on October 12, 2024 and sell it today you would earn a total of 544.00 from holding Shantui Construction Machinery or generate 128.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shantui Construction Machinery vs. Caihong Display Devices
Performance |
| Timeline |
| Shantui Construction |
| Caihong Display Devices |
Shantui Construction and Caihong Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shantui Construction and Caihong Display
The main advantage of trading using opposite Shantui Construction and Caihong Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shantui Construction position performs unexpectedly, Caihong Display 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 Caihong Display will offset losses from the drop in Caihong Display's long position.| Shantui Construction vs. BYD Co Ltd | Shantui Construction vs. China Mobile Limited | Shantui Construction vs. Agricultural Bank of | Shantui Construction vs. Industrial and Commercial |
| Caihong Display vs. Hubei Geoway Investment | Caihong Display vs. Zhongrun Resources Investment | Caihong Display vs. Jiangsu Yueda Investment | Caihong Display vs. Shantui Construction Machinery |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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