Correlation Between Lianhe Chemical and Shanghai Action
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By analyzing existing cross correlation between Lianhe Chemical Technology and Shanghai Action Education, you can compare the effects of market volatilities on Lianhe Chemical and Shanghai Action 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 Lianhe Chemical with a short position of Shanghai Action. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lianhe Chemical and Shanghai Action.
Diversification Opportunities for Lianhe Chemical and Shanghai Action
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lianhe and Shanghai is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Lianhe Chemical Technology and Shanghai Action Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Action Education and Lianhe Chemical 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 Lianhe Chemical Technology are associated (or correlated) with Shanghai Action. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Action Education has no effect on the direction of Lianhe Chemical i.e., Lianhe Chemical and Shanghai Action go up and down completely randomly.
Pair Corralation between Lianhe Chemical and Shanghai Action
Assuming the 90 days trading horizon Lianhe Chemical Technology is expected to under-perform the Shanghai Action. But the stock apears to be less risky and, when comparing its historical volatility, Lianhe Chemical Technology is 1.04 times less risky than Shanghai Action. The stock trades about -0.02 of its potential returns per unit of risk. The Shanghai Action Education is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,674 in Shanghai Action Education on September 14, 2024 and sell it today you would lose (24.00) from holding Shanghai Action Education or give up 0.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lianhe Chemical Technology vs. Shanghai Action Education
Performance |
| Timeline |
| Lianhe Chemical Tech |
| Shanghai Action Education |
Lianhe Chemical and Shanghai Action Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lianhe Chemical and Shanghai Action
The main advantage of trading using opposite Lianhe Chemical and Shanghai Action positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lianhe Chemical position performs unexpectedly, Shanghai Action 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 Shanghai Action will offset losses from the drop in Shanghai Action's long position.| Lianhe Chemical vs. Zhengping RoadBridge Constr | Lianhe Chemical vs. Jiangsu Broadcasting Cable | Lianhe Chemical vs. Xinjiang Beixin RoadBridge | Lianhe Chemical vs. Zhongshan Broad Ocean Motor |
| Shanghai Action vs. Kingclean Electric Co | Shanghai Action vs. Daoming OpticsChemical Co | Shanghai Action vs. Lianhe Chemical Technology | Shanghai Action vs. Miracll Chemicals 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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