Correlation Between Shandong Hongchuang and Super Dragon
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By analyzing existing cross correlation between Shandong Hongchuang Aluminum and Super Dragon Engineering Plastics, you can compare the effects of market volatilities on Shandong Hongchuang and Super Dragon 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 Super Dragon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Hongchuang and Super Dragon.
Diversification Opportunities for Shandong Hongchuang and Super Dragon
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shandong and Super is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Hongchuang Aluminum and Super Dragon Engineering Plast in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Dragon Enginee 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 Super Dragon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Dragon Enginee has no effect on the direction of Shandong Hongchuang i.e., Shandong Hongchuang and Super Dragon go up and down completely randomly.
Pair Corralation between Shandong Hongchuang and Super Dragon
Assuming the 90 days trading horizon Shandong Hongchuang Aluminum is expected to generate 1.14 times more return on investment than Super Dragon. However, Shandong Hongchuang is 1.14 times more volatile than Super Dragon Engineering Plastics. It trades about 0.16 of its potential returns per unit of risk. Super Dragon Engineering Plastics is currently generating about 0.02 per unit of risk. If you would invest 744.00 in Shandong Hongchuang Aluminum on October 24, 2024 and sell it today you would earn a total of 270.00 from holding Shandong Hongchuang Aluminum or generate 36.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Shandong Hongchuang Aluminum vs. Super Dragon Engineering Plast
Performance |
| Timeline |
| Shandong Hongchuang |
| Super Dragon Enginee |
Shandong Hongchuang and Super Dragon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Hongchuang and Super Dragon
The main advantage of trading using opposite Shandong Hongchuang and Super Dragon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Hongchuang position performs unexpectedly, Super Dragon 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 Super Dragon will offset losses from the drop in Super Dragon's long position.| Shandong Hongchuang vs. Shenyang Huitian Thermal | Shandong Hongchuang vs. Ningxia Building Materials | Shandong Hongchuang vs. Fuda Alloy Materials | Shandong Hongchuang vs. Guocheng Mining Co |
| Super Dragon vs. Impulse Qingdao Health | Super Dragon vs. Gem Year Industrial Co | Super Dragon vs. Shandong Hongchuang Aluminum | Super Dragon vs. Ye Chiu Metal |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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