Correlation Between Sichuan Yahua and Shenzhen Centralcon
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By analyzing existing cross correlation between Sichuan Yahua Industrial and Shenzhen Centralcon Investment, you can compare the effects of market volatilities on Sichuan Yahua and Shenzhen Centralcon 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 Sichuan Yahua with a short position of Shenzhen Centralcon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Yahua and Shenzhen Centralcon.
Diversification Opportunities for Sichuan Yahua and Shenzhen Centralcon
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sichuan and Shenzhen is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Yahua Industrial and Shenzhen Centralcon Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Centralcon and Sichuan Yahua 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 Sichuan Yahua Industrial are associated (or correlated) with Shenzhen Centralcon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Centralcon has no effect on the direction of Sichuan Yahua i.e., Sichuan Yahua and Shenzhen Centralcon go up and down completely randomly.
Pair Corralation between Sichuan Yahua and Shenzhen Centralcon
Assuming the 90 days trading horizon Sichuan Yahua Industrial is expected to generate 0.83 times more return on investment than Shenzhen Centralcon. However, Sichuan Yahua Industrial is 1.2 times less risky than Shenzhen Centralcon. It trades about 0.09 of its potential returns per unit of risk. Shenzhen Centralcon Investment is currently generating about 0.06 per unit of risk. If you would invest 892.00 in Sichuan Yahua Industrial on September 26, 2024 and sell it today you would earn a total of 298.00 from holding Sichuan Yahua Industrial or generate 33.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Yahua Industrial vs. Shenzhen Centralcon Investment
Performance |
| Timeline |
| Sichuan Yahua Industrial |
| Shenzhen Centralcon |
Sichuan Yahua and Shenzhen Centralcon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Yahua and Shenzhen Centralcon
The main advantage of trading using opposite Sichuan Yahua and Shenzhen Centralcon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Yahua position performs unexpectedly, Shenzhen Centralcon 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 Shenzhen Centralcon will offset losses from the drop in Shenzhen Centralcon's long position.| Sichuan Yahua vs. Zijin Mining Group | Sichuan Yahua vs. Wanhua Chemical Group | Sichuan Yahua vs. Baoshan Iron Steel | Sichuan Yahua vs. Shandong Gold Mining |
| Shenzhen Centralcon vs. PetroChina Co Ltd | Shenzhen Centralcon vs. China Mobile Limited | Shenzhen Centralcon vs. CNOOC Limited | Shenzhen Centralcon vs. Ping An Insurance |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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