Correlation Between Sichuan Yahua and Chengdu Spaceon
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By analyzing existing cross correlation between Sichuan Yahua Industrial and Chengdu Spaceon Electronics, you can compare the effects of market volatilities on Sichuan Yahua and Chengdu Spaceon 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 Chengdu Spaceon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Yahua and Chengdu Spaceon.
Diversification Opportunities for Sichuan Yahua and Chengdu Spaceon
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sichuan and Chengdu is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Yahua Industrial and Chengdu Spaceon Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Spaceon Elec 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 Chengdu Spaceon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Spaceon Elec has no effect on the direction of Sichuan Yahua i.e., Sichuan Yahua and Chengdu Spaceon go up and down completely randomly.
Pair Corralation between Sichuan Yahua and Chengdu Spaceon
Assuming the 90 days trading horizon Sichuan Yahua is expected to generate 1.19 times less return on investment than Chengdu Spaceon. But when comparing it to its historical volatility, Sichuan Yahua Industrial is 1.04 times less risky than Chengdu Spaceon. It trades about 0.03 of its potential returns per unit of risk. Chengdu Spaceon Electronics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,522 in Chengdu Spaceon Electronics on September 14, 2024 and sell it today you would earn a total of 290.00 from holding Chengdu Spaceon Electronics or generate 19.05% 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. Chengdu Spaceon Electronics
Performance |
| Timeline |
| Sichuan Yahua Industrial |
| Chengdu Spaceon Elec |
Sichuan Yahua and Chengdu Spaceon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Yahua and Chengdu Spaceon
The main advantage of trading using opposite Sichuan Yahua and Chengdu Spaceon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Yahua position performs unexpectedly, Chengdu Spaceon 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 Chengdu Spaceon will offset losses from the drop in Chengdu Spaceon'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 |
| Chengdu Spaceon vs. Gem Year Industrial Co | Chengdu Spaceon vs. Huafa Industrial Co | Chengdu Spaceon vs. Jiangxi Selon Industrial | Chengdu Spaceon vs. Tongyu Communication |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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