Correlation Between Advanced Technology and Shantui Construction
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By analyzing existing cross correlation between Advanced Technology Materials and Shantui Construction Machinery, you can compare the effects of market volatilities on Advanced Technology and Shantui 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 Advanced Technology with a short position of Shantui Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Technology and Shantui Construction.
Diversification Opportunities for Advanced Technology and Shantui Construction
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Advanced and Shantui is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Technology Materials and Shantui Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shantui Construction and Advanced Technology 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 Advanced Technology Materials are associated (or correlated) with Shantui Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shantui Construction has no effect on the direction of Advanced Technology i.e., Advanced Technology and Shantui Construction go up and down completely randomly.
Pair Corralation between Advanced Technology and Shantui Construction
Assuming the 90 days trading horizon Advanced Technology is expected to generate 2.52 times less return on investment than Shantui Construction. But when comparing it to its historical volatility, Advanced Technology Materials is 1.18 times less risky than Shantui Construction. It trades about 0.03 of its potential returns per unit of risk. Shantui Construction Machinery is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 424.00 in Shantui Construction Machinery on October 16, 2024 and sell it today you would earn a total of 517.00 from holding Shantui Construction Machinery or generate 121.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Technology Materials vs. Shantui Construction Machinery
Performance |
| Timeline |
| Advanced Technology |
| Shantui Construction |
Advanced Technology and Shantui Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Technology and Shantui Construction
The main advantage of trading using opposite Advanced Technology and Shantui Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Technology position performs unexpectedly, Shantui 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 Shantui Construction will offset losses from the drop in Shantui Construction's long position.| Advanced Technology vs. Guilin Seamild Foods | Advanced Technology vs. Yili Chuanning Biotechnology | Advanced Technology vs. JuneYao Dairy Co | Advanced Technology vs. Shandong Sanyuan Biotechnology |
| Shantui Construction vs. Inspur Software Co | Shantui Construction vs. Advanced Technology Materials | Shantui Construction vs. Guangzhou Tinci Materials | Shantui Construction vs. Western Metal Materials |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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