Correlation Between Shenwu Energy and Shaanxi Construction
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By analyzing existing cross correlation between Shenwu Energy Saving and Shaanxi Construction Machinery, you can compare the effects of market volatilities on Shenwu Energy and Shaanxi Construction 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 Shaanxi Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenwu Energy and Shaanxi Construction.
Diversification Opportunities for Shenwu Energy and Shaanxi Construction
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenwu and Shaanxi is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Shenwu Energy Saving and Shaanxi Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Construction 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 Shaanxi Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Construction has no effect on the direction of Shenwu Energy i.e., Shenwu Energy and Shaanxi Construction go up and down completely randomly.
Pair Corralation between Shenwu Energy and Shaanxi Construction
Assuming the 90 days trading horizon Shenwu Energy Saving is expected to under-perform the Shaanxi Construction. But the stock apears to be less risky and, when comparing its historical volatility, Shenwu Energy Saving is 1.29 times less risky than Shaanxi Construction. The stock trades about -0.08 of its potential returns per unit of risk. The Shaanxi Construction Machinery is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 359.00 in Shaanxi Construction Machinery on September 4, 2024 and sell it today you would lose (10.00) from holding Shaanxi Construction Machinery or give up 2.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenwu Energy Saving vs. Shaanxi Construction Machinery
Performance |
| Timeline |
| Shenwu Energy Saving |
| Shaanxi Construction |
Shenwu Energy and Shaanxi Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenwu Energy and Shaanxi Construction
The main advantage of trading using opposite Shenwu Energy and Shaanxi Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenwu Energy position performs unexpectedly, Shaanxi Construction 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 Shaanxi Construction will offset losses from the drop in Shaanxi Construction's long position.| Shenwu Energy vs. Guilin Seamild Foods | Shenwu Energy vs. HUAQIN TECHNOLOGY LTD | Shenwu Energy vs. Shanghai Ziyan Foods | Shenwu Energy vs. Linewell Software Co |
| Shaanxi Construction vs. Chengdu Kanghua Biological | Shaanxi Construction vs. Beijing Wantai Biological | Shaanxi Construction vs. Suzhou Novoprotein Scientific | Shaanxi Construction vs. Aluminum Corp 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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