Correlation Between New Hope and Shandong Sanyuan
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By analyzing existing cross correlation between New Hope Dairy and Shandong Sanyuan Biotechnology, you can compare the effects of market volatilities on New Hope 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 New Hope with a short position of Shandong Sanyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Hope and Shandong Sanyuan.
Diversification Opportunities for New Hope and Shandong Sanyuan
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between New and Shandong is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding New Hope Dairy 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 New Hope 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 New Hope Dairy 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 New Hope i.e., New Hope and Shandong Sanyuan go up and down completely randomly.
Pair Corralation between New Hope and Shandong Sanyuan
Assuming the 90 days trading horizon New Hope Dairy is expected to generate 1.39 times more return on investment than Shandong Sanyuan. However, New Hope is 1.39 times more volatile than Shandong Sanyuan Biotechnology. It trades about 0.21 of its potential returns per unit of risk. Shandong Sanyuan Biotechnology is currently generating about -0.02 per unit of risk. If you would invest 1,169 in New Hope Dairy on August 31, 2024 and sell it today you would earn a total of 131.00 from holding New Hope Dairy or generate 11.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Hope Dairy vs. Shandong Sanyuan Biotechnology
Performance |
| Timeline |
| New Hope Dairy |
| Shandong Sanyuan Bio |
New Hope and Shandong Sanyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Hope and Shandong Sanyuan
The main advantage of trading using opposite New Hope and Shandong Sanyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Hope 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.| New Hope vs. Lutian Machinery Co | New Hope vs. PetroChina Co Ltd | New Hope vs. Bank of China | New Hope vs. Gansu Jiu Steel |
| Shandong Sanyuan vs. Everdisplay Optronics Shanghai | Shandong Sanyuan vs. Western Superconducting Tech | Shandong Sanyuan vs. Sportsoul Co Ltd | Shandong Sanyuan vs. HanS Laser Tech |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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