Correlation Between Shenzhen Noposion and Shandong Iron
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By analyzing existing cross correlation between Shenzhen Noposion Agrochemicals and Shandong Iron and, you can compare the effects of market volatilities on Shenzhen Noposion and Shandong Iron 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 Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Noposion and Shandong Iron.
Diversification Opportunities for Shenzhen Noposion and Shandong Iron
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shenzhen and Shandong is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Noposion Agrochemical and Shandong Iron and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Iron 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 Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Iron has no effect on the direction of Shenzhen Noposion i.e., Shenzhen Noposion and Shandong Iron go up and down completely randomly.
Pair Corralation between Shenzhen Noposion and Shandong Iron
Assuming the 90 days trading horizon Shenzhen Noposion Agrochemicals is expected to generate 1.09 times more return on investment than Shandong Iron. However, Shenzhen Noposion is 1.09 times more volatile than Shandong Iron and. It trades about 0.08 of its potential returns per unit of risk. Shandong Iron and is currently generating about 0.01 per unit of risk. If you would invest 913.00 in Shenzhen Noposion Agrochemicals on October 24, 2024 and sell it today you would earn a total of 118.00 from holding Shenzhen Noposion Agrochemicals or generate 12.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Noposion Agrochemical vs. Shandong Iron and
Performance |
| Timeline |
| Shenzhen Noposion |
| Shandong Iron |
Shenzhen Noposion and Shandong Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Noposion and Shandong Iron
The main advantage of trading using opposite Shenzhen Noposion and Shandong Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Noposion position performs unexpectedly, Shandong Iron 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 Iron will offset losses from the drop in Shandong Iron's long position.The idea behind Shenzhen Noposion Agrochemicals and Shandong Iron and 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.
| Shandong Iron vs. Shenzhen Noposion Agrochemicals | Shandong Iron vs. Shandong Polymer Biochemicals | Shandong Iron vs. Sportsoul Co Ltd | Shandong Iron vs. Hubeiyichang Transportation 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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