Correlation Between Shandong Longda and Eastroc Beverage
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By analyzing existing cross correlation between Shandong Longda Meat and Eastroc Beverage Group, you can compare the effects of market volatilities on Shandong Longda and Eastroc Beverage 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 Longda with a short position of Eastroc Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Longda and Eastroc Beverage.
Diversification Opportunities for Shandong Longda and Eastroc Beverage
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Eastroc is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Longda Meat and Eastroc Beverage Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastroc Beverage and Shandong Longda 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 Longda Meat are associated (or correlated) with Eastroc Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastroc Beverage has no effect on the direction of Shandong Longda i.e., Shandong Longda and Eastroc Beverage go up and down completely randomly.
Pair Corralation between Shandong Longda and Eastroc Beverage
Assuming the 90 days trading horizon Shandong Longda Meat is expected to under-perform the Eastroc Beverage. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Longda Meat is 1.0 times less risky than Eastroc Beverage. The stock trades about -0.12 of its potential returns per unit of risk. The Eastroc Beverage Group is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 22,395 in Eastroc Beverage Group on October 11, 2024 and sell it today you would earn a total of 4,496 from holding Eastroc Beverage Group or generate 20.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Longda Meat vs. Eastroc Beverage Group
Performance |
| Timeline |
| Shandong Longda Meat |
| Eastroc Beverage |
Shandong Longda and Eastroc Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Longda and Eastroc Beverage
The main advantage of trading using opposite Shandong Longda and Eastroc Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Longda position performs unexpectedly, Eastroc Beverage 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 Eastroc Beverage will offset losses from the drop in Eastroc Beverage's long position.| Shandong Longda vs. Tongling Nonferrous Metals | Shandong Longda vs. Ping An Insurance | Shandong Longda vs. Postal Savings Bank | Shandong Longda vs. Peoples Insurance of |
| Eastroc Beverage vs. Quectel Wireless Solutions | Eastroc Beverage vs. Henan Shuanghui Investment | Eastroc Beverage vs. Tieling Newcity Investment | Eastroc Beverage vs. Dongfeng Automobile 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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