Correlation Between Shantui Construction and Bomin Electronics
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By analyzing existing cross correlation between Shantui Construction Machinery and Bomin Electronics Co, you can compare the effects of market volatilities on Shantui Construction and Bomin Electronics 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 Bomin Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shantui Construction and Bomin Electronics.
Diversification Opportunities for Shantui Construction and Bomin Electronics
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shantui and Bomin is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Shantui Construction Machinery and Bomin Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bomin Electronics 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 Bomin Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bomin Electronics has no effect on the direction of Shantui Construction i.e., Shantui Construction and Bomin Electronics go up and down completely randomly.
Pair Corralation between Shantui Construction and Bomin Electronics
Assuming the 90 days trading horizon Shantui Construction Machinery is expected to generate 0.92 times more return on investment than Bomin Electronics. However, Shantui Construction Machinery is 1.09 times less risky than Bomin Electronics. It trades about 0.08 of its potential returns per unit of risk. Bomin Electronics Co is currently generating about -0.03 per unit of risk. If you would invest 424.00 in Shantui Construction Machinery on October 15, 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shantui Construction Machinery vs. Bomin Electronics Co
Performance |
| Timeline |
| Shantui Construction |
| Bomin Electronics |
Shantui Construction and Bomin Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shantui Construction and Bomin Electronics
The main advantage of trading using opposite Shantui Construction and Bomin Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shantui Construction position performs unexpectedly, Bomin Electronics 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 Bomin Electronics will offset losses from the drop in Bomin Electronics' long position.| Shantui Construction vs. Inspur Software Co | Shantui Construction vs. Advanced Technology Materials | Shantui Construction vs. Guangzhou Tinci Materials | Shantui Construction vs. Western Metal Materials |
| Bomin Electronics vs. Aba Chemicals Corp | Bomin Electronics vs. Vohringer Home Technology | Bomin Electronics vs. Mengtian Home Group | Bomin Electronics vs. Guangzhou Dongfang Hotel |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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