Correlation Between Changchun and Shaanxi Meineng
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By analyzing existing cross correlation between Changchun UP Optotech and Shaanxi Meineng Clean, you can compare the effects of market volatilities on Changchun and Shaanxi Meineng 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 Meineng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun and Shaanxi Meineng.
Diversification Opportunities for Changchun and Shaanxi Meineng
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changchun and Shaanxi is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Changchun UP Optotech and Shaanxi Meineng Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Meineng Clean 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 Meineng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Meineng Clean has no effect on the direction of Changchun i.e., Changchun and Shaanxi Meineng go up and down completely randomly.
Pair Corralation between Changchun and Shaanxi Meineng
Assuming the 90 days trading horizon Changchun UP Optotech is expected to under-perform the Shaanxi Meineng. In addition to that, Changchun is 1.24 times more volatile than Shaanxi Meineng Clean. It trades about -0.09 of its total potential returns per unit of risk. Shaanxi Meineng Clean is currently generating about -0.11 per unit of volatility. If you would invest 1,382 in Shaanxi Meineng Clean on October 30, 2024 and sell it today you would lose (127.00) from holding Shaanxi Meineng Clean or give up 9.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun UP Optotech vs. Shaanxi Meineng Clean
Performance |
| Timeline |
| Changchun UP Optotech |
| Shaanxi Meineng Clean |
Changchun and Shaanxi Meineng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun and Shaanxi Meineng
The main advantage of trading using opposite Changchun and Shaanxi Meineng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun position performs unexpectedly, Shaanxi Meineng 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 Meineng will offset losses from the drop in Shaanxi Meineng's long position.| Changchun vs. Wuhan Yangtze Communication | Changchun vs. Queclink Wireless Solutions | Changchun vs. Zotye Automobile Co | Changchun vs. Ningbo Fangzheng Automobile |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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