Correlation Between Shenyang Chemical and Songz Automobile
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By analyzing existing cross correlation between Shenyang Chemical Industry and Songz Automobile Air, you can compare the effects of market volatilities on Shenyang Chemical and Songz Automobile 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 Shenyang Chemical with a short position of Songz Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Chemical and Songz Automobile.
Diversification Opportunities for Shenyang Chemical and Songz Automobile
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenyang and Songz is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Chemical Industry and Songz Automobile Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Songz Automobile Air and Shenyang Chemical 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 Shenyang Chemical Industry are associated (or correlated) with Songz Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Songz Automobile Air has no effect on the direction of Shenyang Chemical i.e., Shenyang Chemical and Songz Automobile go up and down completely randomly.
Pair Corralation between Shenyang Chemical and Songz Automobile
Assuming the 90 days trading horizon Shenyang Chemical Industry is expected to under-perform the Songz Automobile. In addition to that, Shenyang Chemical is 1.11 times more volatile than Songz Automobile Air. It trades about -0.02 of its total potential returns per unit of risk. Songz Automobile Air is currently generating about -0.01 per unit of volatility. If you would invest 815.00 in Songz Automobile Air on October 31, 2024 and sell it today you would lose (146.00) from holding Songz Automobile Air or give up 17.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenyang Chemical Industry vs. Songz Automobile Air
Performance |
| Timeline |
| Shenyang Chemical |
| Songz Automobile Air |
Shenyang Chemical and Songz Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenyang Chemical and Songz Automobile
The main advantage of trading using opposite Shenyang Chemical and Songz Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Chemical position performs unexpectedly, Songz Automobile 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 Songz Automobile will offset losses from the drop in Songz Automobile's long position.| Shenyang Chemical vs. XinJiang GuoTong Pipeline | Shenyang Chemical vs. Guangzhou Zhujiang Brewery | Shenyang Chemical vs. Jiangsu Yanghe Brewery | Shenyang Chemical vs. Spring Airlines Co |
| Songz Automobile vs. Jiangsu Hoperun Software | Songz Automobile vs. Hangzhou Pinming Software | Songz Automobile vs. Inspur Software Co | Songz Automobile vs. Thunder Software Technology |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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