Correlation Between Shandong Hongchuang and Xiandai Investment
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By analyzing existing cross correlation between Shandong Hongchuang Aluminum and Xiandai Investment Co, you can compare the effects of market volatilities on Shandong Hongchuang and Xiandai 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 Shandong Hongchuang with a short position of Xiandai Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Hongchuang and Xiandai Investment.
Diversification Opportunities for Shandong Hongchuang and Xiandai Investment
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Xiandai is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Hongchuang Aluminum and Xiandai Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiandai Investment 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 Xiandai Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiandai Investment has no effect on the direction of Shandong Hongchuang i.e., Shandong Hongchuang and Xiandai Investment go up and down completely randomly.
Pair Corralation between Shandong Hongchuang and Xiandai Investment
Assuming the 90 days trading horizon Shandong Hongchuang Aluminum is expected to under-perform the Xiandai Investment. In addition to that, Shandong Hongchuang is 1.03 times more volatile than Xiandai Investment Co. It trades about -0.08 of its total potential returns per unit of risk. Xiandai Investment Co is currently generating about 0.15 per unit of volatility. If you would invest 428.00 in Xiandai Investment Co on September 12, 2024 and sell it today you would earn a total of 38.00 from holding Xiandai Investment Co or generate 8.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Hongchuang Aluminum vs. Xiandai Investment Co
Performance |
| Timeline |
| Shandong Hongchuang |
| Xiandai Investment |
Shandong Hongchuang and Xiandai Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Hongchuang and Xiandai Investment
The main advantage of trading using opposite Shandong Hongchuang and Xiandai Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Hongchuang position performs unexpectedly, Xiandai 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 Xiandai Investment will offset losses from the drop in Xiandai Investment'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 |
| Xiandai Investment vs. Agricultural Bank of | Xiandai Investment vs. Industrial and Commercial | Xiandai Investment vs. Bank of China | Xiandai Investment vs. PetroChina Co Ltd |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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