Correlation Between Shaanxi Energy and Hubeiyichang Transportation
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By analyzing existing cross correlation between Shaanxi Energy Investment and Hubeiyichang Transportation Group, you can compare the effects of market volatilities on Shaanxi Energy and Hubeiyichang Transportation 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 Hubeiyichang Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Energy and Hubeiyichang Transportation.
Diversification Opportunities for Shaanxi Energy and Hubeiyichang Transportation
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shaanxi and Hubeiyichang is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Energy Investment and Hubeiyichang Transportation Gr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubeiyichang Transportation 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 Hubeiyichang Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubeiyichang Transportation has no effect on the direction of Shaanxi Energy i.e., Shaanxi Energy and Hubeiyichang Transportation go up and down completely randomly.
Pair Corralation between Shaanxi Energy and Hubeiyichang Transportation
Assuming the 90 days trading horizon Shaanxi Energy is expected to generate 7.07 times less return on investment than Hubeiyichang Transportation. But when comparing it to its historical volatility, Shaanxi Energy Investment is 1.01 times less risky than Hubeiyichang Transportation. It trades about 0.02 of its potential returns per unit of risk. Hubeiyichang Transportation Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 460.00 in Hubeiyichang Transportation Group on August 29, 2024 and sell it today you would earn a total of 68.00 from holding Hubeiyichang Transportation Group or generate 14.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Energy Investment vs. Hubeiyichang Transportation Gr
Performance |
| Timeline |
| Shaanxi Energy Investment |
| Hubeiyichang Transportation |
Shaanxi Energy and Hubeiyichang Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Energy and Hubeiyichang Transportation
The main advantage of trading using opposite Shaanxi Energy and Hubeiyichang Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Energy position performs unexpectedly, Hubeiyichang Transportation 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 Hubeiyichang Transportation will offset losses from the drop in Hubeiyichang Transportation's long position.| Shaanxi Energy vs. Zhejiang Kingland Pipeline | Shaanxi Energy vs. Gansu Jiu Steel | Shaanxi Energy vs. Shenzhen MTC Co | Shaanxi Energy vs. Ming Yang Smart |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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