Correlation Between Shandong Hongchuang and Minami Acoustics
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By analyzing existing cross correlation between Shandong Hongchuang Aluminum and Minami Acoustics Ltd, you can compare the effects of market volatilities on Shandong Hongchuang and Minami Acoustics 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 Minami Acoustics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Hongchuang and Minami Acoustics.
Diversification Opportunities for Shandong Hongchuang and Minami Acoustics
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Minami is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Hongchuang Aluminum and Minami Acoustics Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minami Acoustics 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 Minami Acoustics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minami Acoustics has no effect on the direction of Shandong Hongchuang i.e., Shandong Hongchuang and Minami Acoustics go up and down completely randomly.
Pair Corralation between Shandong Hongchuang and Minami Acoustics
Assuming the 90 days trading horizon Shandong Hongchuang is expected to generate 1.33 times less return on investment than Minami Acoustics. But when comparing it to its historical volatility, Shandong Hongchuang Aluminum is 1.84 times less risky than Minami Acoustics. It trades about 0.22 of its potential returns per unit of risk. Minami Acoustics Ltd is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,476 in Minami Acoustics Ltd on November 3, 2024 and sell it today you would earn a total of 3,554 from holding Minami Acoustics Ltd or generate 143.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.16% |
| Values | Daily Returns |
Shandong Hongchuang Aluminum vs. Minami Acoustics Ltd
Performance |
| Timeline |
| Shandong Hongchuang |
| Minami Acoustics |
Shandong Hongchuang and Minami Acoustics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Hongchuang and Minami Acoustics
The main advantage of trading using opposite Shandong Hongchuang and Minami Acoustics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Hongchuang position performs unexpectedly, Minami Acoustics 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 Minami Acoustics will offset losses from the drop in Minami Acoustics' long position.| Shandong Hongchuang vs. Eastern Communications Co | Shandong Hongchuang vs. Qtone Education Group | Shandong Hongchuang vs. Sinomach Automobile Co | Shandong Hongchuang vs. Wintao Communications Co |
| Minami Acoustics vs. SSAW Hotels Resorts | Minami Acoustics vs. Chison Medical Technologies | Minami Acoustics vs. Jinling Hotel Corp | Minami Acoustics vs. Zhonghong Pulin Medical |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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