Correlation Between Qingdao Foods and Shandong Hongchuang
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By analyzing existing cross correlation between Qingdao Foods Co and Shandong Hongchuang Aluminum, you can compare the effects of market volatilities on Qingdao Foods and Shandong Hongchuang 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 Qingdao Foods with a short position of Shandong Hongchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingdao Foods and Shandong Hongchuang.
Diversification Opportunities for Qingdao Foods and Shandong Hongchuang
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Qingdao and Shandong is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Qingdao Foods Co and Shandong Hongchuang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Hongchuang and Qingdao Foods 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 Qingdao Foods Co are associated (or correlated) with Shandong Hongchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Hongchuang has no effect on the direction of Qingdao Foods i.e., Qingdao Foods and Shandong Hongchuang go up and down completely randomly.
Pair Corralation between Qingdao Foods and Shandong Hongchuang
Assuming the 90 days trading horizon Qingdao Foods Co is expected to under-perform the Shandong Hongchuang. In addition to that, Qingdao Foods is 1.13 times more volatile than Shandong Hongchuang Aluminum. It trades about -0.02 of its total potential returns per unit of risk. Shandong Hongchuang Aluminum is currently generating about 0.36 per unit of volatility. If you would invest 725.00 in Shandong Hongchuang Aluminum on September 29, 2024 and sell it today you would earn a total of 172.00 from holding Shandong Hongchuang Aluminum or generate 23.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qingdao Foods Co vs. Shandong Hongchuang Aluminum
Performance |
| Timeline |
| Qingdao Foods |
| Shandong Hongchuang |
Qingdao Foods and Shandong Hongchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qingdao Foods and Shandong Hongchuang
The main advantage of trading using opposite Qingdao Foods and Shandong Hongchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingdao Foods position performs unexpectedly, Shandong Hongchuang 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 Shandong Hongchuang will offset losses from the drop in Shandong Hongchuang's long position.| Qingdao Foods vs. Ming Yang Smart | Qingdao Foods vs. 159681 | Qingdao Foods vs. 159005 | Qingdao Foods vs. Loctek Ergonomic Technology |
| Shandong Hongchuang vs. Wanhua Chemical Group | Shandong Hongchuang vs. Shandong Gold Mining | Shandong Hongchuang vs. Rongsheng Petrochemical Co | Shandong Hongchuang vs. Inner Mongolia BaoTou |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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