Correlation Between Guangdong Shenglu and Shenwu Energy
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Shenwu Energy Saving, you can compare the effects of market volatilities on Guangdong Shenglu and Shenwu Energy 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 Guangdong Shenglu with a short position of Shenwu Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Shenwu Energy.
Diversification Opportunities for Guangdong Shenglu and Shenwu Energy
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Shenwu is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic and Shenwu Energy Saving in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenwu Energy Saving and Guangdong Shenglu 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 Guangdong Shenglu Telecommunication are associated (or correlated) with Shenwu Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenwu Energy Saving has no effect on the direction of Guangdong Shenglu i.e., Guangdong Shenglu and Shenwu Energy go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Shenwu Energy
Assuming the 90 days trading horizon Guangdong Shenglu Telecommunication is expected to under-perform the Shenwu Energy. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Shenglu Telecommunication is 2.13 times less risky than Shenwu Energy. The stock trades about -0.26 of its potential returns per unit of risk. The Shenwu Energy Saving is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 338.00 in Shenwu Energy Saving on October 30, 2024 and sell it today you would lose (38.00) from holding Shenwu Energy Saving or give up 11.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Shenwu Energy Saving
Performance |
| Timeline |
| Guangdong Shenglu |
| Shenwu Energy Saving |
Guangdong Shenglu and Shenwu Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Shenglu and Shenwu Energy
The main advantage of trading using opposite Guangdong Shenglu and Shenwu Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu position performs unexpectedly, Shenwu Energy 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 Shenwu Energy will offset losses from the drop in Shenwu Energy's long position.| Guangdong Shenglu vs. Jiangsu Yueda Investment | Guangdong Shenglu vs. Shandong Longquan Pipeline | Guangdong Shenglu vs. Zoje Resources Investment | Guangdong Shenglu vs. Zhejiang Kingland Pipeline |
| Shenwu Energy vs. Industrial and Commercial | Shenwu Energy vs. Agricultural Bank of | Shenwu Energy vs. China Construction Bank | Shenwu Energy vs. Bank of China |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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