Correlation Between China Securities and Super Dragon
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By analyzing existing cross correlation between China Securities 800 and Super Dragon Engineering Plastics, you can compare the effects of market volatilities on China Securities and Super Dragon 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 China Securities with a short position of Super Dragon. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Super Dragon.
Diversification Opportunities for China Securities and Super Dragon
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Super is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Super Dragon Engineering Plast in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Dragon Enginee and China Securities 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 China Securities 800 are associated (or correlated) with Super Dragon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Dragon Enginee has no effect on the direction of China Securities i.e., China Securities and Super Dragon go up and down completely randomly.
Pair Corralation between China Securities and Super Dragon
Assuming the 90 days trading horizon China Securities is expected to generate 5.21 times less return on investment than Super Dragon. But when comparing it to its historical volatility, China Securities 800 is 2.98 times less risky than Super Dragon. It trades about 0.01 of its potential returns per unit of risk. Super Dragon Engineering Plastics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,845 in Super Dragon Engineering Plastics on September 12, 2024 and sell it today you would earn a total of 316.00 from holding Super Dragon Engineering Plastics or generate 8.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. Super Dragon Engineering Plast
Performance |
| Timeline |
China Securities and Super Dragon Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Super Dragon Engineering Plastics
Pair trading matchups for Super Dragon
Pair Trading with China Securities and Super Dragon
The main advantage of trading using opposite China Securities and Super Dragon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Super Dragon 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 Super Dragon will offset losses from the drop in Super Dragon's long position.| China Securities vs. Ningxia Building Materials | China Securities vs. Western Metal Materials | China Securities vs. Ningbo Bohui Chemical | China Securities vs. Hengerda New Materials |
| Super Dragon vs. Agricultural Bank of | Super Dragon vs. Industrial and Commercial | Super Dragon vs. Bank of China | Super Dragon vs. PetroChina Co Ltd |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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