Correlation Between Shandong Hongchuang and Chongqing Shunbo
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By analyzing existing cross correlation between Shandong Hongchuang Aluminum and Chongqing Shunbo Aluminum, you can compare the effects of market volatilities on Shandong Hongchuang and Chongqing Shunbo 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 Chongqing Shunbo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Hongchuang and Chongqing Shunbo.
Diversification Opportunities for Shandong Hongchuang and Chongqing Shunbo
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shandong and Chongqing is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Hongchuang Aluminum and Chongqing Shunbo Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Shunbo Aluminum 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 Chongqing Shunbo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Shunbo Aluminum has no effect on the direction of Shandong Hongchuang i.e., Shandong Hongchuang and Chongqing Shunbo go up and down completely randomly.
Pair Corralation between Shandong Hongchuang and Chongqing Shunbo
Assuming the 90 days trading horizon Shandong Hongchuang is expected to generate 1.37 times less return on investment than Chongqing Shunbo. In addition to that, Shandong Hongchuang is 1.47 times more volatile than Chongqing Shunbo Aluminum. It trades about 0.04 of its total potential returns per unit of risk. Chongqing Shunbo Aluminum is currently generating about 0.08 per unit of volatility. If you would invest 648.00 in Chongqing Shunbo Aluminum on September 1, 2024 and sell it today you would earn a total of 21.00 from holding Chongqing Shunbo Aluminum or generate 3.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Hongchuang Aluminum vs. Chongqing Shunbo Aluminum
Performance |
| Timeline |
| Shandong Hongchuang |
| Chongqing Shunbo Aluminum |
Shandong Hongchuang and Chongqing Shunbo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Hongchuang and Chongqing Shunbo
The main advantage of trading using opposite Shandong Hongchuang and Chongqing Shunbo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Hongchuang position performs unexpectedly, Chongqing Shunbo 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 Chongqing Shunbo will offset losses from the drop in Chongqing Shunbo's long position.| Shandong Hongchuang vs. Dareway Software Co | Shandong Hongchuang vs. Anji Foodstuff Co | Shandong Hongchuang vs. Beijing Yanjing Brewery | Shandong Hongchuang vs. Yankershop Food Co |
| Chongqing Shunbo vs. Shanghai Jinfeng Wine | Chongqing Shunbo vs. Hubei Forbon Technology | Chongqing Shunbo vs. Guangzhou KingTeller Technology | Chongqing Shunbo vs. ROPEOK Technology Group |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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