Correlation Between SH Energy and SV Investment
Can any of the company-specific risk be diversified away by investing in both SH Energy and SV Investment at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SH Energy and SV Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SH Energy Chemical and SV Investment, you can compare the effects of market volatilities on SH Energy and SV Investment 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 SH Energy with a short position of SV Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SH Energy and SV Investment.
Diversification Opportunities for SH Energy and SV Investment
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 002360 and 289080 is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding SH Energy Chemical and SV Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SV Investment and SH Energy 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 SH Energy Chemical are associated (or correlated) with SV Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SV Investment has no effect on the direction of SH Energy i.e., SH Energy and SV Investment go up and down completely randomly.
Pair Corralation between SH Energy and SV Investment
Assuming the 90 days trading horizon SH Energy Chemical is expected to generate 1.53 times more return on investment than SV Investment. However, SH Energy is 1.53 times more volatile than SV Investment. It trades about 0.09 of its potential returns per unit of risk. SV Investment is currently generating about -0.25 per unit of risk. If you would invest 51,600 in SH Energy Chemical on August 25, 2024 and sell it today you would earn a total of 2,900 from holding SH Energy Chemical or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SH Energy Chemical vs. SV Investment
Performance |
| Timeline |
| SH Energy Chemical |
| SV Investment |
SH Energy and SV Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SH Energy and SV Investment
The main advantage of trading using opposite SH Energy and SV Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SH Energy position performs unexpectedly, SV Investment 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 SV Investment will offset losses from the drop in SV Investment's long position.| SH Energy vs. AptaBio Therapeutics | SH Energy vs. Daewoo SBI SPAC | SH Energy vs. Dream Security co | SH Energy vs. Microfriend |
| SV Investment vs. Aprogen Healthcare Games | SV Investment vs. SM Entertainment Co | SV Investment vs. KIWI Media Group | SV Investment vs. Digital Multimedia Technology |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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