Correlation Between Shaanxi Meineng and Shandong Huifa
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By analyzing existing cross correlation between Shaanxi Meineng Clean and Shandong Huifa Foodstuff, you can compare the effects of market volatilities on Shaanxi Meineng and Shandong Huifa 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 Shandong Huifa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Meineng and Shandong Huifa.
Diversification Opportunities for Shaanxi Meineng and Shandong Huifa
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shaanxi and Shandong is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Meineng Clean and Shandong Huifa Foodstuff in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Huifa Foodstuff 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 Shandong Huifa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Huifa Foodstuff has no effect on the direction of Shaanxi Meineng i.e., Shaanxi Meineng and Shandong Huifa go up and down completely randomly.
Pair Corralation between Shaanxi Meineng and Shandong Huifa
Assuming the 90 days trading horizon Shaanxi Meineng Clean is expected to under-perform the Shandong Huifa. But the stock apears to be less risky and, when comparing its historical volatility, Shaanxi Meineng Clean is 2.37 times less risky than Shandong Huifa. The stock trades about 0.0 of its potential returns per unit of risk. The Shandong Huifa Foodstuff is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,075 in Shandong Huifa Foodstuff on September 12, 2024 and sell it today you would earn a total of 248.00 from holding Shandong Huifa Foodstuff or generate 23.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Meineng Clean vs. Shandong Huifa Foodstuff
Performance |
| Timeline |
| Shaanxi Meineng Clean |
| Shandong Huifa Foodstuff |
Shaanxi Meineng and Shandong Huifa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Meineng and Shandong Huifa
The main advantage of trading using opposite Shaanxi Meineng and Shandong Huifa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Meineng position performs unexpectedly, Shandong Huifa 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 Huifa will offset losses from the drop in Shandong Huifa's long position.| Shaanxi Meineng vs. Gansu Jiu Steel | Shaanxi Meineng vs. Shandong Mining Machinery | Shaanxi Meineng vs. Aba Chemicals Corp | Shaanxi Meineng vs. BlueFocus Communication Group |
| Shandong Huifa vs. China Petroleum Chemical | Shandong Huifa vs. PetroChina Co Ltd | Shandong Huifa vs. China State Construction | Shandong Huifa vs. China Railway Group |
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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