Correlation Between Shandong Longquan and Shenwu Energy
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By analyzing existing cross correlation between Shandong Longquan Pipeline and Shenwu Energy Saving, you can compare the effects of market volatilities on Shandong Longquan 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 Shandong Longquan with a short position of Shenwu Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Longquan and Shenwu Energy.
Diversification Opportunities for Shandong Longquan and Shenwu Energy
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shandong and Shenwu is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Longquan Pipeline 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 Shandong Longquan 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 Shandong Longquan Pipeline 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 Shandong Longquan i.e., Shandong Longquan and Shenwu Energy go up and down completely randomly.
Pair Corralation between Shandong Longquan and Shenwu Energy
Assuming the 90 days trading horizon Shandong Longquan Pipeline is expected to generate 1.06 times more return on investment than Shenwu Energy. However, Shandong Longquan is 1.06 times more volatile than Shenwu Energy Saving. It trades about 0.04 of its potential returns per unit of risk. Shenwu Energy Saving is currently generating about -0.19 per unit of risk. If you would invest 469.00 in Shandong Longquan Pipeline on September 3, 2024 and sell it today you would earn a total of 7.00 from holding Shandong Longquan Pipeline or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Longquan Pipeline vs. Shenwu Energy Saving
Performance |
| Timeline |
| Shandong Longquan |
| Shenwu Energy Saving |
Shandong Longquan and Shenwu Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Longquan and Shenwu Energy
The main advantage of trading using opposite Shandong Longquan and Shenwu Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Longquan 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.| Shandong Longquan vs. Hunan Investment Group | Shandong Longquan vs. Xiandai Investment Co | Shandong Longquan vs. Ningbo Ligong Online | Shandong Longquan vs. Bank of Suzhou |
| Shenwu Energy vs. Shanghai Action Education | Shenwu Energy vs. Offcn Education Technology | Shenwu Energy vs. Hubeiyichang Transportation Group | Shenwu Energy vs. Shanghai Broadband Technology |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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