Correlation Between Shandong Hongchuang and Lootom Telcovideo
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By analyzing existing cross correlation between Shandong Hongchuang Aluminum and Lootom Telcovideo Network, you can compare the effects of market volatilities on Shandong Hongchuang and Lootom Telcovideo 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 Lootom Telcovideo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Hongchuang and Lootom Telcovideo.
Diversification Opportunities for Shandong Hongchuang and Lootom Telcovideo
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Lootom is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Hongchuang Aluminum and Lootom Telcovideo Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lootom Telcovideo Network 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 Lootom Telcovideo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lootom Telcovideo Network has no effect on the direction of Shandong Hongchuang i.e., Shandong Hongchuang and Lootom Telcovideo go up and down completely randomly.
Pair Corralation between Shandong Hongchuang and Lootom Telcovideo
Assuming the 90 days trading horizon Shandong Hongchuang Aluminum is expected to generate 0.87 times more return on investment than Lootom Telcovideo. However, Shandong Hongchuang Aluminum is 1.14 times less risky than Lootom Telcovideo. It trades about 0.08 of its potential returns per unit of risk. Lootom Telcovideo Network is currently generating about 0.04 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Hongchuang Aluminum vs. Lootom Telcovideo Network
Performance |
| Timeline |
| Shandong Hongchuang |
| Lootom Telcovideo Network |
Shandong Hongchuang and Lootom Telcovideo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Hongchuang and Lootom Telcovideo
The main advantage of trading using opposite Shandong Hongchuang and Lootom Telcovideo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Hongchuang position performs unexpectedly, Lootom Telcovideo 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 Lootom Telcovideo will offset losses from the drop in Lootom Telcovideo'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 |
| Lootom Telcovideo vs. Western Metal Materials | Lootom Telcovideo vs. Dymatic Chemicals | Lootom Telcovideo vs. Xinjiang Baodi Mining | Lootom Telcovideo vs. Shenzhen Noposion Agrochemicals |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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