Correlation Between Shandong Hongchuang and Asia Potash
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By analyzing existing cross correlation between Shandong Hongchuang Aluminum and Asia Potash International, you can compare the effects of market volatilities on Shandong Hongchuang and Asia Potash 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 Shandong Hongchuang with a short position of Asia Potash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Hongchuang and Asia Potash.
Diversification Opportunities for Shandong Hongchuang and Asia Potash
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Asia is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Hongchuang Aluminum and Asia Potash International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Potash International and Shandong Hongchuang 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 Shandong Hongchuang Aluminum are associated (or correlated) with Asia Potash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Potash International has no effect on the direction of Shandong Hongchuang i.e., Shandong Hongchuang and Asia Potash go up and down completely randomly.
Pair Corralation between Shandong Hongchuang and Asia Potash
Assuming the 90 days trading horizon Shandong Hongchuang Aluminum is expected to generate 0.93 times more return on investment than Asia Potash. However, Shandong Hongchuang Aluminum is 1.07 times less risky than Asia Potash. It trades about 0.08 of its potential returns per unit of risk. Asia Potash International is currently generating about -0.01 per unit of risk. If you would invest 439.00 in Shandong Hongchuang Aluminum on September 12, 2024 and sell it today you would earn a total of 316.00 from holding Shandong Hongchuang Aluminum or generate 71.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.71% |
| Values | Daily Returns |
Shandong Hongchuang Aluminum vs. Asia Potash International
Performance |
| Timeline |
| Shandong Hongchuang |
| Asia Potash International |
Shandong Hongchuang and Asia Potash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Hongchuang and Asia Potash
The main advantage of trading using opposite Shandong Hongchuang and Asia Potash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Hongchuang position performs unexpectedly, Asia Potash 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 Asia Potash will offset losses from the drop in Asia Potash's long position.| Shandong Hongchuang vs. Zijin Mining Group | Shandong Hongchuang vs. Wanhua Chemical Group | Shandong Hongchuang vs. Baoshan Iron Steel | Shandong Hongchuang vs. Rongsheng Petrochemical Co |
| Asia Potash vs. Emdoor Information Co | Asia Potash vs. Sunwave Communications Co | Asia Potash vs. State Grid InformationCommunication | Asia Potash vs. Jilin Jlu Communication |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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