Correlation Between Shaanxi Meineng and Porton Fine
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By analyzing existing cross correlation between Shaanxi Meineng Clean and Porton Fine Chemicals, you can compare the effects of market volatilities on Shaanxi Meineng and Porton Fine 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 Porton Fine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Meineng and Porton Fine.
Diversification Opportunities for Shaanxi Meineng and Porton Fine
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shaanxi and Porton is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Meineng Clean and Porton Fine Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Porton Fine Chemicals 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 Porton Fine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Porton Fine Chemicals has no effect on the direction of Shaanxi Meineng i.e., Shaanxi Meineng and Porton Fine go up and down completely randomly.
Pair Corralation between Shaanxi Meineng and Porton Fine
Assuming the 90 days trading horizon Shaanxi Meineng Clean is expected to generate 0.9 times more return on investment than Porton Fine. However, Shaanxi Meineng Clean is 1.11 times less risky than Porton Fine. It trades about -0.02 of its potential returns per unit of risk. Porton Fine Chemicals is currently generating about -0.05 per unit of risk. If you would invest 1,923 in Shaanxi Meineng Clean on November 7, 2024 and sell it today you would lose (668.00) from holding Shaanxi Meineng Clean or give up 34.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Meineng Clean vs. Porton Fine Chemicals
Performance |
| Timeline |
| Shaanxi Meineng Clean |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Porton Fine Chemicals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shaanxi Meineng and Porton Fine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Meineng and Porton Fine
The main advantage of trading using opposite Shaanxi Meineng and Porton Fine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Meineng position performs unexpectedly, Porton Fine 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 Porton Fine will offset losses from the drop in Porton Fine's long position.The idea behind Shaanxi Meineng Clean and Porton Fine Chemicals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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