Correlation Between Shandong Hongchuang and Anhui Deli
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By analyzing existing cross correlation between Shandong Hongchuang Aluminum and Anhui Deli Household, you can compare the effects of market volatilities on Shandong Hongchuang and Anhui Deli 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 Anhui Deli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Hongchuang and Anhui Deli.
Diversification Opportunities for Shandong Hongchuang and Anhui Deli
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shandong and Anhui is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Hongchuang Aluminum and Anhui Deli Household in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Deli Household 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 Anhui Deli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Deli Household has no effect on the direction of Shandong Hongchuang i.e., Shandong Hongchuang and Anhui Deli go up and down completely randomly.
Pair Corralation between Shandong Hongchuang and Anhui Deli
Assuming the 90 days trading horizon Shandong Hongchuang Aluminum is expected to generate 0.74 times more return on investment than Anhui Deli. However, Shandong Hongchuang Aluminum is 1.34 times less risky than Anhui Deli. It trades about 0.08 of its potential returns per unit of risk. Anhui Deli Household is currently generating about -0.02 per unit of risk. If you would invest 424.00 in Shandong Hongchuang Aluminum on September 28, 2024 and sell it today you would earn a total of 473.00 from holding Shandong Hongchuang Aluminum or generate 111.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Shandong Hongchuang Aluminum vs. Anhui Deli Household
Performance |
| Timeline |
| Shandong Hongchuang |
| Anhui Deli Household |
Shandong Hongchuang and Anhui Deli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Hongchuang and Anhui Deli
The main advantage of trading using opposite Shandong Hongchuang and Anhui Deli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Hongchuang position performs unexpectedly, Anhui Deli 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 Anhui Deli will offset losses from the drop in Anhui Deli's long position.| Shandong Hongchuang vs. Wintao Communications Co | Shandong Hongchuang vs. Xiangpiaopiao Food Co | Shandong Hongchuang vs. Gansu Huangtai Wine marketing | Shandong Hongchuang vs. Qingdao Foods Co |
| Anhui Deli vs. Northking Information Technology | Anhui Deli vs. Qingdao Choho Industrial | Anhui Deli vs. Xinjiang Baodi Mining | Anhui Deli vs. Hengli Industrial Development |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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