Correlation Between Shandong Hongchuang and Marssenger Kitchenware
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By analyzing existing cross correlation between Shandong Hongchuang Aluminum and Marssenger Kitchenware Co, you can compare the effects of market volatilities on Shandong Hongchuang and Marssenger Kitchenware 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 Marssenger Kitchenware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Hongchuang and Marssenger Kitchenware.
Diversification Opportunities for Shandong Hongchuang and Marssenger Kitchenware
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shandong and Marssenger is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Hongchuang Aluminum and Marssenger Kitchenware Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marssenger Kitchenware 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 Marssenger Kitchenware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marssenger Kitchenware has no effect on the direction of Shandong Hongchuang i.e., Shandong Hongchuang and Marssenger Kitchenware go up and down completely randomly.
Pair Corralation between Shandong Hongchuang and Marssenger Kitchenware
Assuming the 90 days trading horizon Shandong Hongchuang Aluminum is expected to generate 0.67 times more return on investment than Marssenger Kitchenware. However, Shandong Hongchuang Aluminum is 1.5 times less risky than Marssenger Kitchenware. It trades about 0.08 of its potential returns per unit of risk. Marssenger Kitchenware Co is currently generating about -0.03 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. Marssenger Kitchenware Co
Performance |
| Timeline |
| Shandong Hongchuang |
| Marssenger Kitchenware |
Shandong Hongchuang and Marssenger Kitchenware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Hongchuang and Marssenger Kitchenware
The main advantage of trading using opposite Shandong Hongchuang and Marssenger Kitchenware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Hongchuang position performs unexpectedly, Marssenger Kitchenware 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 Marssenger Kitchenware will offset losses from the drop in Marssenger Kitchenware'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 |
| Marssenger Kitchenware vs. Agricultural Bank of | Marssenger Kitchenware vs. Industrial and Commercial | Marssenger Kitchenware vs. Bank of China | Marssenger Kitchenware vs. China Construction Bank |
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