Correlation Between Shaanxi Energy and Hunan Investment
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By analyzing existing cross correlation between Shaanxi Energy Investment and Hunan Investment Group, you can compare the effects of market volatilities on Shaanxi Energy and Hunan Investment 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 Shaanxi Energy with a short position of Hunan Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Energy and Hunan Investment.
Diversification Opportunities for Shaanxi Energy and Hunan Investment
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shaanxi and Hunan is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Energy Investment and Hunan Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Investment and Shaanxi 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 Shaanxi Energy Investment are associated (or correlated) with Hunan Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Investment has no effect on the direction of Shaanxi Energy i.e., Shaanxi Energy and Hunan Investment go up and down completely randomly.
Pair Corralation between Shaanxi Energy and Hunan Investment
Assuming the 90 days trading horizon Shaanxi Energy is expected to generate 6.21 times less return on investment than Hunan Investment. But when comparing it to its historical volatility, Shaanxi Energy Investment is 1.47 times less risky than Hunan Investment. It trades about 0.01 of its potential returns per unit of risk. Hunan Investment Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 495.00 in Hunan Investment Group on September 12, 2024 and sell it today you would earn a total of 103.00 from holding Hunan Investment Group or generate 20.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Energy Investment vs. Hunan Investment Group
Performance |
| Timeline |
| Shaanxi Energy Investment |
| Hunan Investment |
Shaanxi Energy and Hunan Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Energy and Hunan Investment
The main advantage of trading using opposite Shaanxi Energy and Hunan Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Energy position performs unexpectedly, Hunan Investment 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 Hunan Investment will offset losses from the drop in Hunan Investment's long position.| Shaanxi Energy vs. Zhejiang Kingland Pipeline | Shaanxi Energy vs. Gansu Jiu Steel | Shaanxi Energy vs. Shandong Mining Machinery | Shaanxi Energy vs. Aba Chemicals Corp |
| Hunan Investment vs. Agricultural Bank of | Hunan Investment vs. Industrial and Commercial | Hunan Investment vs. Bank of China | Hunan Investment 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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