Correlation Between Shenzhen Silver and Shandong Longquan
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By analyzing existing cross correlation between Shenzhen Silver Basis and Shandong Longquan Pipeline, you can compare the effects of market volatilities on Shenzhen Silver and Shandong Longquan 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 Shenzhen Silver with a short position of Shandong Longquan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Silver and Shandong Longquan.
Diversification Opportunities for Shenzhen Silver and Shandong Longquan
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shenzhen and Shandong is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Silver Basis and Shandong Longquan Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Longquan and Shenzhen Silver 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 Shenzhen Silver Basis are associated (or correlated) with Shandong Longquan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Longquan has no effect on the direction of Shenzhen Silver i.e., Shenzhen Silver and Shandong Longquan go up and down completely randomly.
Pair Corralation between Shenzhen Silver and Shandong Longquan
Assuming the 90 days trading horizon Shenzhen Silver Basis is expected to under-perform the Shandong Longquan. In addition to that, Shenzhen Silver is 1.33 times more volatile than Shandong Longquan Pipeline. It trades about -0.35 of its total potential returns per unit of risk. Shandong Longquan Pipeline is currently generating about -0.12 per unit of volatility. If you would invest 507.00 in Shandong Longquan Pipeline on October 11, 2024 and sell it today you would lose (57.00) from holding Shandong Longquan Pipeline or give up 11.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Silver Basis vs. Shandong Longquan Pipeline
Performance |
| Timeline |
| Shenzhen Silver Basis |
| Shandong Longquan |
Shenzhen Silver and Shandong Longquan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Silver and Shandong Longquan
The main advantage of trading using opposite Shenzhen Silver and Shandong Longquan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Silver position performs unexpectedly, Shandong Longquan 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 Longquan will offset losses from the drop in Shandong Longquan's long position.| Shenzhen Silver vs. Eastern Air Logistics | Shenzhen Silver vs. Sinocat Environmental Technology | Shenzhen Silver vs. Invengo Information Technology | Shenzhen Silver vs. Sharetronic Data Technology |
| Shandong Longquan vs. Hubei Xingfa Chemicals | Shandong Longquan vs. Haima Automobile Group | Shandong Longquan vs. Zhongshan Public Utilities | Shandong Longquan vs. Miracll Chemicals 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 CEOs Directory module to screen CEOs from public companies around the world.
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