Correlation Between Changchun and Shaanxi Energy
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By analyzing existing cross correlation between Changchun UP Optotech and Shaanxi Energy Investment, you can compare the effects of market volatilities on Changchun and Shaanxi Energy 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 Changchun with a short position of Shaanxi Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun and Shaanxi Energy.
Diversification Opportunities for Changchun and Shaanxi Energy
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Changchun and Shaanxi is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Changchun UP Optotech and Shaanxi Energy Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Energy Investment and Changchun 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 Changchun UP Optotech are associated (or correlated) with Shaanxi Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Energy Investment has no effect on the direction of Changchun i.e., Changchun and Shaanxi Energy go up and down completely randomly.
Pair Corralation between Changchun and Shaanxi Energy
Assuming the 90 days trading horizon Changchun UP Optotech is expected to generate 1.88 times more return on investment than Shaanxi Energy. However, Changchun is 1.88 times more volatile than Shaanxi Energy Investment. It trades about 0.02 of its potential returns per unit of risk. Shaanxi Energy Investment is currently generating about 0.03 per unit of risk. If you would invest 3,763 in Changchun UP Optotech on September 26, 2024 and sell it today you would earn a total of 218.00 from holding Changchun UP Optotech or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun UP Optotech vs. Shaanxi Energy Investment
Performance |
| Timeline |
| Changchun UP Optotech |
| Shaanxi Energy Investment |
Changchun and Shaanxi Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun and Shaanxi Energy
The main advantage of trading using opposite Changchun and Shaanxi Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun position performs unexpectedly, Shaanxi Energy 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 Shaanxi Energy will offset losses from the drop in Shaanxi Energy's long position.| Changchun vs. Cultural Investment Holdings | Changchun vs. Gome Telecom Equipment | Changchun vs. Bus Online Co | Changchun vs. Holitech Technology Co |
| Shaanxi Energy vs. Zhejiang Kingland Pipeline | Shaanxi Energy vs. Elite Color Environmental | Shaanxi Energy vs. Shanghai Construction Group | Shaanxi Energy vs. Keeson Technology Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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