Correlation Between Guangdong Shenglu and Shaanxi Meineng
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Shaanxi Meineng Clean, you can compare the effects of market volatilities on Guangdong Shenglu and Shaanxi Meineng 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 Shaanxi Meineng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Shaanxi Meineng.
Diversification Opportunities for Guangdong Shenglu and Shaanxi Meineng
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Shaanxi is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic and Shaanxi Meineng Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Meineng Clean 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 Shaanxi Meineng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Meineng Clean has no effect on the direction of Guangdong Shenglu i.e., Guangdong Shenglu and Shaanxi Meineng go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Shaanxi Meineng
Assuming the 90 days trading horizon Guangdong Shenglu is expected to generate 1.14 times less return on investment than Shaanxi Meineng. In addition to that, Guangdong Shenglu is 1.38 times more volatile than Shaanxi Meineng Clean. It trades about 0.03 of its total potential returns per unit of risk. Shaanxi Meineng Clean is currently generating about 0.04 per unit of volatility. If you would invest 1,152 in Shaanxi Meineng Clean on November 3, 2024 and sell it today you would earn a total of 103.00 from holding Shaanxi Meineng Clean or generate 8.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Shaanxi Meineng Clean
Performance |
| Timeline |
| Guangdong Shenglu |
| Shaanxi Meineng Clean |
Guangdong Shenglu and Shaanxi Meineng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Shenglu and Shaanxi Meineng
The main advantage of trading using opposite Guangdong Shenglu and Shaanxi Meineng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu position performs unexpectedly, Shaanxi Meineng 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 Shaanxi Meineng will offset losses from the drop in Shaanxi Meineng's long position.| Guangdong Shenglu vs. CIMC Vehicles Co | Guangdong Shenglu vs. Shenzhen Centralcon Investment | Guangdong Shenglu vs. Henan Shuanghui Investment | Guangdong Shenglu vs. Sportsoul Co Ltd |
| Shaanxi Meineng vs. Offshore Oil Engineering | Shaanxi Meineng vs. Air China Ltd | Shaanxi Meineng vs. Linewell Software Co | Shaanxi Meineng vs. HanS Laser Tech |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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