Correlation Between Shaanxi Meineng and Hubei Dinglong
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By analyzing existing cross correlation between Shaanxi Meineng Clean and Hubei Dinglong Chemical, you can compare the effects of market volatilities on Shaanxi Meineng and Hubei Dinglong 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 Meineng with a short position of Hubei Dinglong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Meineng and Hubei Dinglong.
Diversification Opportunities for Shaanxi Meineng and Hubei Dinglong
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shaanxi and Hubei is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Meineng Clean and Hubei Dinglong Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Dinglong Chemical and Shaanxi Meineng 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 Meineng Clean are associated (or correlated) with Hubei Dinglong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Dinglong Chemical has no effect on the direction of Shaanxi Meineng i.e., Shaanxi Meineng and Hubei Dinglong go up and down completely randomly.
Pair Corralation between Shaanxi Meineng and Hubei Dinglong
Assuming the 90 days trading horizon Shaanxi Meineng is expected to generate 2.18 times less return on investment than Hubei Dinglong. But when comparing it to its historical volatility, Shaanxi Meineng Clean is 1.38 times less risky than Hubei Dinglong. It trades about 0.04 of its potential returns per unit of risk. Hubei Dinglong Chemical is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,249 in Hubei Dinglong Chemical on August 29, 2024 and sell it today you would earn a total of 410.00 from holding Hubei Dinglong Chemical or generate 18.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Meineng Clean vs. Hubei Dinglong Chemical
Performance |
| Timeline |
| Shaanxi Meineng Clean |
| Hubei Dinglong Chemical |
Shaanxi Meineng and Hubei Dinglong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Meineng and Hubei Dinglong
The main advantage of trading using opposite Shaanxi Meineng and Hubei Dinglong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Meineng position performs unexpectedly, Hubei Dinglong 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 Hubei Dinglong will offset losses from the drop in Hubei Dinglong's long position.| Shaanxi Meineng vs. Cambricon Technologies Corp | Shaanxi Meineng vs. Loongson Technology Corp | Shaanxi Meineng vs. Chongqing Road Bridge | Shaanxi Meineng vs. Shenzhen Fortune Trend |
| Hubei Dinglong vs. Zijin Mining Group | Hubei Dinglong vs. Baoshan Iron Steel | Hubei Dinglong vs. Shandong Gold Mining | Hubei Dinglong vs. Rongsheng Petrochemical Co |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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