Correlation Between Shenzhen Noposion and Shandong Hongchuang
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By analyzing existing cross correlation between Shenzhen Noposion Agrochemicals and Shandong Hongchuang Aluminum, you can compare the effects of market volatilities on Shenzhen Noposion and Shandong Hongchuang 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 Shenzhen Noposion with a short position of Shandong Hongchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Noposion and Shandong Hongchuang.
Diversification Opportunities for Shenzhen Noposion and Shandong Hongchuang
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Shandong is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Noposion Agrochemical and Shandong Hongchuang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Hongchuang and Shenzhen Noposion 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 Shenzhen Noposion Agrochemicals are associated (or correlated) with Shandong Hongchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Hongchuang has no effect on the direction of Shenzhen Noposion i.e., Shenzhen Noposion and Shandong Hongchuang go up and down completely randomly.
Pair Corralation between Shenzhen Noposion and Shandong Hongchuang
Assuming the 90 days trading horizon Shenzhen Noposion is expected to generate 2.26 times less return on investment than Shandong Hongchuang. But when comparing it to its historical volatility, Shenzhen Noposion Agrochemicals is 1.19 times less risky than Shandong Hongchuang. It trades about 0.11 of its potential returns per unit of risk. Shandong Hongchuang Aluminum is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 741.00 in Shandong Hongchuang Aluminum on October 16, 2024 and sell it today you would earn a total of 246.00 from holding Shandong Hongchuang Aluminum or generate 33.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Shenzhen Noposion Agrochemical vs. Shandong Hongchuang Aluminum
Performance |
| Timeline |
| Shenzhen Noposion |
| Shandong Hongchuang |
Shenzhen Noposion and Shandong Hongchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Noposion and Shandong Hongchuang
The main advantage of trading using opposite Shenzhen Noposion and Shandong Hongchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Noposion position performs unexpectedly, Shandong Hongchuang 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 Hongchuang will offset losses from the drop in Shandong Hongchuang's long position.| Shenzhen Noposion vs. Caihong Display Devices | Shenzhen Noposion vs. Fiberhome Telecommunication Technologies | Shenzhen Noposion vs. Success Electronics | Shenzhen Noposion vs. Aurora Optoelectronics 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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