Correlation Between Shandong Hongchuang and Qingdao Foods
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By analyzing existing cross correlation between Shandong Hongchuang Aluminum and Qingdao Foods Co, you can compare the effects of market volatilities on Shandong Hongchuang and Qingdao Foods 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 Qingdao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Hongchuang and Qingdao Foods.
Diversification Opportunities for Shandong Hongchuang and Qingdao Foods
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shandong and Qingdao is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Hongchuang Aluminum and Qingdao Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Foods 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 Qingdao Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Foods has no effect on the direction of Shandong Hongchuang i.e., Shandong Hongchuang and Qingdao Foods go up and down completely randomly.
Pair Corralation between Shandong Hongchuang and Qingdao Foods
Assuming the 90 days trading horizon Shandong Hongchuang Aluminum is expected to generate 1.42 times more return on investment than Qingdao Foods. However, Shandong Hongchuang is 1.42 times more volatile than Qingdao Foods Co. It trades about 0.38 of its potential returns per unit of risk. Qingdao Foods Co is currently generating about -0.29 per unit of risk. If you would invest 766.00 in Shandong Hongchuang Aluminum on October 12, 2024 and sell it today you would earn a total of 256.00 from holding Shandong Hongchuang Aluminum or generate 33.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Shandong Hongchuang Aluminum vs. Qingdao Foods Co
Performance |
| Timeline |
| Shandong Hongchuang |
| Qingdao Foods |
Shandong Hongchuang and Qingdao Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Hongchuang and Qingdao Foods
The main advantage of trading using opposite Shandong Hongchuang and Qingdao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Hongchuang position performs unexpectedly, Qingdao Foods 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 Qingdao Foods will offset losses from the drop in Qingdao Foods' long position.| Shandong Hongchuang vs. Sunwave Communications Co | Shandong Hongchuang vs. HeBei Jinniu Chemical | Shandong Hongchuang vs. Xilong Chemical Co | Shandong Hongchuang vs. Jinsanjiang Silicon Material |
| Qingdao Foods vs. Shandong Hongchuang Aluminum | Qingdao Foods vs. Anhui Transport Consulting | Qingdao Foods vs. Wuhan Yangtze Communication | Qingdao Foods vs. Aluminum Corp of |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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