Correlation Between Shenwu Energy and Dalian Thermal
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By analyzing existing cross correlation between Shenwu Energy Saving and Dalian Thermal Power, you can compare the effects of market volatilities on Shenwu Energy and Dalian Thermal 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 Dalian Thermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenwu Energy and Dalian Thermal.
Diversification Opportunities for Shenwu Energy and Dalian Thermal
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenwu and Dalian is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Shenwu Energy Saving and Dalian Thermal Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalian Thermal Power 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 Dalian Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalian Thermal Power has no effect on the direction of Shenwu Energy i.e., Shenwu Energy and Dalian Thermal go up and down completely randomly.
Pair Corralation between Shenwu Energy and Dalian Thermal
Assuming the 90 days trading horizon Shenwu Energy Saving is expected to generate 3.19 times more return on investment than Dalian Thermal. However, Shenwu Energy is 3.19 times more volatile than Dalian Thermal Power. It trades about 0.03 of its potential returns per unit of risk. Dalian Thermal Power is currently generating about -0.03 per unit of risk. If you would invest 303.00 in Shenwu Energy Saving on November 6, 2024 and sell it today you would lose (3.00) from holding Shenwu Energy Saving or give up 0.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenwu Energy Saving vs. Dalian Thermal Power
Performance |
| Timeline |
| Shenwu Energy Saving |
| Dalian Thermal Power |
Shenwu Energy and Dalian Thermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenwu Energy and Dalian Thermal
The main advantage of trading using opposite Shenwu Energy and Dalian Thermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenwu Energy position performs unexpectedly, Dalian Thermal 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 Dalian Thermal will offset losses from the drop in Dalian Thermal's long position.| Shenwu Energy vs. Industrial and Commercial | Shenwu Energy vs. Agricultural Bank of | Shenwu Energy vs. China Construction Bank | Shenwu Energy vs. Bank of China |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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