Correlation Between Runjian Communication and Sanxiang Advanced
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By analyzing existing cross correlation between Runjian Communication Co and Sanxiang Advanced Materials, you can compare the effects of market volatilities on Runjian Communication and Sanxiang Advanced 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 Runjian Communication with a short position of Sanxiang Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Runjian Communication and Sanxiang Advanced.
Diversification Opportunities for Runjian Communication and Sanxiang Advanced
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Runjian and Sanxiang is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Runjian Communication Co and Sanxiang Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanxiang Advanced and Runjian Communication 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 Runjian Communication Co are associated (or correlated) with Sanxiang Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanxiang Advanced has no effect on the direction of Runjian Communication i.e., Runjian Communication and Sanxiang Advanced go up and down completely randomly.
Pair Corralation between Runjian Communication and Sanxiang Advanced
Assuming the 90 days trading horizon Runjian Communication is expected to generate 2.43 times less return on investment than Sanxiang Advanced. But when comparing it to its historical volatility, Runjian Communication Co is 1.22 times less risky than Sanxiang Advanced. It trades about 0.04 of its potential returns per unit of risk. Sanxiang Advanced Materials is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,307 in Sanxiang Advanced Materials on October 18, 2024 and sell it today you would earn a total of 441.00 from holding Sanxiang Advanced Materials or generate 33.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Runjian Communication Co vs. Sanxiang Advanced Materials
Performance |
| Timeline |
| Runjian Communication |
| Sanxiang Advanced |
Runjian Communication and Sanxiang Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Runjian Communication and Sanxiang Advanced
The main advantage of trading using opposite Runjian Communication and Sanxiang Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Runjian Communication position performs unexpectedly, Sanxiang Advanced 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 Sanxiang Advanced will offset losses from the drop in Sanxiang Advanced's long position.| Runjian Communication vs. Liuzhou Chemical Industry | Runjian Communication vs. Shenyang Chemical Industry | Runjian Communication vs. Baoshan Iron Steel | Runjian Communication vs. Anyang Iron Steel |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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