Correlation Between Shenzhen Aisidi and Ningxia Building
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By analyzing existing cross correlation between Shenzhen Aisidi Co and Ningxia Building Materials, you can compare the effects of market volatilities on Shenzhen Aisidi and Ningxia Building 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 Shenzhen Aisidi with a short position of Ningxia Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Aisidi and Ningxia Building.
Diversification Opportunities for Shenzhen Aisidi and Ningxia Building
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Ningxia is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Aisidi Co and Ningxia Building Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningxia Building Mat and Shenzhen Aisidi 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 Shenzhen Aisidi Co are associated (or correlated) with Ningxia Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningxia Building Mat has no effect on the direction of Shenzhen Aisidi i.e., Shenzhen Aisidi and Ningxia Building go up and down completely randomly.
Pair Corralation between Shenzhen Aisidi and Ningxia Building
Assuming the 90 days trading horizon Shenzhen Aisidi Co is expected to generate 1.26 times more return on investment than Ningxia Building. However, Shenzhen Aisidi is 1.26 times more volatile than Ningxia Building Materials. It trades about 0.12 of its potential returns per unit of risk. Ningxia Building Materials is currently generating about 0.07 per unit of risk. If you would invest 978.00 in Shenzhen Aisidi Co on September 5, 2024 and sell it today you would earn a total of 604.00 from holding Shenzhen Aisidi Co or generate 61.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Aisidi Co vs. Ningxia Building Materials
Performance |
| Timeline |
| Shenzhen Aisidi |
| Ningxia Building Mat |
Shenzhen Aisidi and Ningxia Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Aisidi and Ningxia Building
The main advantage of trading using opposite Shenzhen Aisidi and Ningxia Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Aisidi position performs unexpectedly, Ningxia Building 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 Ningxia Building will offset losses from the drop in Ningxia Building's long position.| Shenzhen Aisidi vs. Zhengzhou Coal Mining | Shenzhen Aisidi vs. Shandong Mining Machinery | Shenzhen Aisidi vs. Guocheng Mining Co | Shenzhen Aisidi vs. Guangdong Jingyi Metal |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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