Correlation Between Shandong Longquan and Shenzhen MYS
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By analyzing existing cross correlation between Shandong Longquan Pipeline and Shenzhen MYS Environmental, you can compare the effects of market volatilities on Shandong Longquan and Shenzhen MYS 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 Shenzhen MYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Longquan and Shenzhen MYS.
Diversification Opportunities for Shandong Longquan and Shenzhen MYS
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Shenzhen is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Longquan Pipeline and Shenzhen MYS Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen MYS Environ 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 Shenzhen MYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen MYS Environ has no effect on the direction of Shandong Longquan i.e., Shandong Longquan and Shenzhen MYS go up and down completely randomly.
Pair Corralation between Shandong Longquan and Shenzhen MYS
Assuming the 90 days trading horizon Shandong Longquan Pipeline is expected to generate 0.56 times more return on investment than Shenzhen MYS. However, Shandong Longquan Pipeline is 1.78 times less risky than Shenzhen MYS. It trades about 0.19 of its potential returns per unit of risk. Shenzhen MYS Environmental is currently generating about -0.06 per unit of risk. If you would invest 448.00 in Shandong Longquan Pipeline on November 3, 2024 and sell it today you would earn a total of 26.00 from holding Shandong Longquan Pipeline or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Longquan Pipeline vs. Shenzhen MYS Environmental
Performance |
| Timeline |
| Shandong Longquan |
| Shenzhen MYS Environ |
Shandong Longquan and Shenzhen MYS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Longquan and Shenzhen MYS
The main advantage of trading using opposite Shandong Longquan and Shenzhen MYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Longquan position performs unexpectedly, Shenzhen MYS 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 MYS will offset losses from the drop in Shenzhen MYS's long position.| Shandong Longquan vs. Newcapec Electronics Co | Shandong Longquan vs. Sihui Fuji Electronics | Shandong Longquan vs. Zhengping RoadBridge Constr | Shandong Longquan vs. Shijiazhuang Tonhe Electronics |
| Shenzhen MYS vs. Zijin Mining Group | Shenzhen MYS vs. Wanhua Chemical Group | Shenzhen MYS vs. Baoshan Iron Steel | Shenzhen MYS vs. Shandong Gold Mining |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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