Correlation Between Zhejiang Construction and Shandong Sanyuan
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By analyzing existing cross correlation between Zhejiang Construction Investment and Shandong Sanyuan Biotechnology, you can compare the effects of market volatilities on Zhejiang Construction and Shandong Sanyuan 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 Zhejiang Construction with a short position of Shandong Sanyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Construction and Shandong Sanyuan.
Diversification Opportunities for Zhejiang Construction and Shandong Sanyuan
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Zhejiang and Shandong is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Construction Investme and Shandong Sanyuan Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Sanyuan Bio and Zhejiang Construction 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 Zhejiang Construction Investment are associated (or correlated) with Shandong Sanyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Sanyuan Bio has no effect on the direction of Zhejiang Construction i.e., Zhejiang Construction and Shandong Sanyuan go up and down completely randomly.
Pair Corralation between Zhejiang Construction and Shandong Sanyuan
Assuming the 90 days trading horizon Zhejiang Construction Investment is expected to under-perform the Shandong Sanyuan. But the stock apears to be less risky and, when comparing its historical volatility, Zhejiang Construction Investment is 1.3 times less risky than Shandong Sanyuan. The stock trades about -0.65 of its potential returns per unit of risk. The Shandong Sanyuan Biotechnology is currently generating about -0.23 of returns per unit of risk over similar time horizon. If you would invest 2,845 in Shandong Sanyuan Biotechnology on October 10, 2024 and sell it today you would lose (340.00) from holding Shandong Sanyuan Biotechnology or give up 11.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Construction Investme vs. Shandong Sanyuan Biotechnology
Performance |
| Timeline |
| Zhejiang Construction |
| Shandong Sanyuan Bio |
Zhejiang Construction and Shandong Sanyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Construction and Shandong Sanyuan
The main advantage of trading using opposite Zhejiang Construction and Shandong Sanyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Construction position performs unexpectedly, Shandong Sanyuan 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 Sanyuan will offset losses from the drop in Shandong Sanyuan's long position.| Zhejiang Construction vs. Fibocom Wireless | Zhejiang Construction vs. Songz Automobile Air | Zhejiang Construction vs. Sublime China Information | Zhejiang Construction vs. Iat Automobile Technology |
| Shandong Sanyuan vs. Mengtian Home Group | Shandong Sanyuan vs. Hangzhou Gisway Information | Shandong Sanyuan vs. Oppein Home Group | Shandong Sanyuan vs. Digital China Information |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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