Correlation Between Shenwu Energy and Hua Xia
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By analyzing existing cross correlation between Shenwu Energy Saving and Hua Xia Bank, you can compare the effects of market volatilities on Shenwu Energy and Hua Xia 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 Shenwu Energy with a short position of Hua Xia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenwu Energy and Hua Xia.
Diversification Opportunities for Shenwu Energy and Hua Xia
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenwu and Hua is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Shenwu Energy Saving and Hua Xia Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Xia Bank and Shenwu Energy 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 Shenwu Energy Saving are associated (or correlated) with Hua Xia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Xia Bank has no effect on the direction of Shenwu Energy i.e., Shenwu Energy and Hua Xia go up and down completely randomly.
Pair Corralation between Shenwu Energy and Hua Xia
Assuming the 90 days trading horizon Shenwu Energy is expected to generate 1.66 times less return on investment than Hua Xia. In addition to that, Shenwu Energy is 1.6 times more volatile than Hua Xia Bank. It trades about 0.08 of its total potential returns per unit of risk. Hua Xia Bank is currently generating about 0.23 per unit of volatility. If you would invest 708.00 in Hua Xia Bank on September 15, 2024 and sell it today you would earn a total of 61.00 from holding Hua Xia Bank or generate 8.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenwu Energy Saving vs. Hua Xia Bank
Performance |
| Timeline |
| Shenwu Energy Saving |
| Hua Xia Bank |
Shenwu Energy and Hua Xia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenwu Energy and Hua Xia
The main advantage of trading using opposite Shenwu Energy and Hua Xia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenwu Energy position performs unexpectedly, Hua Xia 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 Hua Xia will offset losses from the drop in Hua Xia's long position.| Shenwu Energy vs. Zhejiang Yayi Metal | Shenwu Energy vs. Shantou Wanshun Package | Shenwu Energy vs. Youyou Foods Co | Shenwu Energy vs. Great Sun Foods Co |
| Hua Xia vs. Industrial and Commercial | Hua Xia vs. China Construction Bank | Hua Xia vs. Bank of China | Hua Xia vs. Agricultural Bank of |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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