Correlation Between Sichuan Yahua and Shandong Pharmaceutical
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By analyzing existing cross correlation between Sichuan Yahua Industrial and Shandong Pharmaceutical Glass, you can compare the effects of market volatilities on Sichuan Yahua and Shandong Pharmaceutical 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 Shandong Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Yahua and Shandong Pharmaceutical.
Diversification Opportunities for Sichuan Yahua and Shandong Pharmaceutical
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sichuan and Shandong is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Yahua Industrial and Shandong Pharmaceutical Glass in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Pharmaceutical 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 Shandong Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Pharmaceutical has no effect on the direction of Sichuan Yahua i.e., Sichuan Yahua and Shandong Pharmaceutical go up and down completely randomly.
Pair Corralation between Sichuan Yahua and Shandong Pharmaceutical
Assuming the 90 days trading horizon Sichuan Yahua Industrial is expected to generate 2.42 times more return on investment than Shandong Pharmaceutical. However, Sichuan Yahua is 2.42 times more volatile than Shandong Pharmaceutical Glass. It trades about 0.12 of its potential returns per unit of risk. Shandong Pharmaceutical Glass is currently generating about -0.14 per unit of risk. If you would invest 1,185 in Sichuan Yahua Industrial on September 12, 2024 and sell it today you would earn a total of 79.00 from holding Sichuan Yahua Industrial or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sichuan Yahua Industrial vs. Shandong Pharmaceutical Glass
Performance |
| Timeline |
| Sichuan Yahua Industrial |
| Shandong Pharmaceutical |
Sichuan Yahua and Shandong Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Yahua and Shandong Pharmaceutical
The main advantage of trading using opposite Sichuan Yahua and Shandong Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Yahua position performs unexpectedly, Shandong Pharmaceutical 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 Shandong Pharmaceutical will offset losses from the drop in Shandong Pharmaceutical's long position.| Sichuan Yahua vs. Zijin Mining Group | Sichuan Yahua vs. Wanhua Chemical Group | Sichuan Yahua vs. Baoshan Iron Steel | Sichuan Yahua vs. Rongsheng Petrochemical Co |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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