Correlation Between Shaanxi Energy and Shandong Homey
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By analyzing existing cross correlation between Shaanxi Energy Investment and Shandong Homey Aquatic, you can compare the effects of market volatilities on Shaanxi Energy and Shandong Homey 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 Shandong Homey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Energy and Shandong Homey.
Diversification Opportunities for Shaanxi Energy and Shandong Homey
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shaanxi and Shandong is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Energy Investment and Shandong Homey Aquatic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Homey Aquatic 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 Shandong Homey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Homey Aquatic has no effect on the direction of Shaanxi Energy i.e., Shaanxi Energy and Shandong Homey go up and down completely randomly.
Pair Corralation between Shaanxi Energy and Shandong Homey
Assuming the 90 days trading horizon Shaanxi Energy Investment is expected to under-perform the Shandong Homey. But the stock apears to be less risky and, when comparing its historical volatility, Shaanxi Energy Investment is 3.56 times less risky than Shandong Homey. The stock trades about -0.05 of its potential returns per unit of risk. The Shandong Homey Aquatic is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 261.00 in Shandong Homey Aquatic on September 13, 2024 and sell it today you would earn a total of 46.00 from holding Shandong Homey Aquatic or generate 17.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Energy Investment vs. Shandong Homey Aquatic
Performance |
| Timeline |
| Shaanxi Energy Investment |
| Shandong Homey Aquatic |
Shaanxi Energy and Shandong Homey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Energy and Shandong Homey
The main advantage of trading using opposite Shaanxi Energy and Shandong Homey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Energy position performs unexpectedly, Shandong Homey 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 Homey will offset losses from the drop in Shandong Homey's long position.| Shaanxi Energy vs. Zhejiang Kingland Pipeline | Shaanxi Energy vs. HOB Biotech Group | Shaanxi Energy vs. Ming Yang Smart | Shaanxi Energy vs. 159681 |
| Shandong Homey vs. Nanjing Putian Telecommunications | Shandong Homey vs. Tianjin Realty Development | Shandong Homey vs. Kangyue Technology Co | Shandong Homey vs. Shenzhen Hifuture Electric |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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