Correlation Between Shaanxi Meineng and Chengdu Kanghua
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By analyzing existing cross correlation between Shaanxi Meineng Clean and Chengdu Kanghua Biological, you can compare the effects of market volatilities on Shaanxi Meineng and Chengdu Kanghua 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 Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Meineng and Chengdu Kanghua.
Diversification Opportunities for Shaanxi Meineng and Chengdu Kanghua
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shaanxi and Chengdu is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Meineng Clean and Chengdu Kanghua Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Kanghua Biol 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 Chengdu Kanghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Kanghua Biol has no effect on the direction of Shaanxi Meineng i.e., Shaanxi Meineng and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between Shaanxi Meineng and Chengdu Kanghua
Assuming the 90 days trading horizon Shaanxi Meineng Clean is expected to generate 1.39 times more return on investment than Chengdu Kanghua. However, Shaanxi Meineng is 1.39 times more volatile than Chengdu Kanghua Biological. It trades about 0.12 of its potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about -0.12 per unit of risk. If you would invest 1,212 in Shaanxi Meineng Clean on November 5, 2024 and sell it today you would earn a total of 43.00 from holding Shaanxi Meineng Clean or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Meineng Clean vs. Chengdu Kanghua Biological
Performance |
| Timeline |
| Shaanxi Meineng Clean |
| Chengdu Kanghua Biol |
Shaanxi Meineng and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Meineng and Chengdu Kanghua
The main advantage of trading using opposite Shaanxi Meineng and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Meineng position performs unexpectedly, Chengdu Kanghua 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 Chengdu Kanghua will offset losses from the drop in Chengdu Kanghua's long position.| Shaanxi Meineng vs. Agricultural Bank of | Shaanxi Meineng vs. Industrial and Commercial | Shaanxi Meineng vs. Bank of China | Shaanxi Meineng vs. China Construction Bank |
| Chengdu Kanghua vs. Zhejiang Huatong Meat | Chengdu Kanghua vs. Jiangsu Financial Leasing | Chengdu Kanghua vs. Hubeiyichang Transportation Group | Chengdu Kanghua vs. China Sports Industry |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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