Correlation Between Chongqing Shunbo and Shandong Hongchuang
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By analyzing existing cross correlation between Chongqing Shunbo Aluminum and Shandong Hongchuang Aluminum, you can compare the effects of market volatilities on Chongqing Shunbo and Shandong Hongchuang 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 Chongqing Shunbo with a short position of Shandong Hongchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Shunbo and Shandong Hongchuang.
Diversification Opportunities for Chongqing Shunbo and Shandong Hongchuang
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chongqing and Shandong is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Shunbo Aluminum and Shandong Hongchuang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Hongchuang and Chongqing Shunbo 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 Chongqing Shunbo Aluminum are associated (or correlated) with Shandong Hongchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Hongchuang has no effect on the direction of Chongqing Shunbo i.e., Chongqing Shunbo and Shandong Hongchuang go up and down completely randomly.
Pair Corralation between Chongqing Shunbo and Shandong Hongchuang
Assuming the 90 days trading horizon Chongqing Shunbo Aluminum is expected to generate 0.68 times more return on investment than Shandong Hongchuang. However, Chongqing Shunbo Aluminum is 1.47 times less risky than Shandong Hongchuang. It trades about 0.08 of its potential returns per unit of risk. Shandong Hongchuang Aluminum is currently generating about 0.04 per unit of risk. If you would invest 648.00 in Chongqing Shunbo Aluminum on September 1, 2024 and sell it today you would earn a total of 21.00 from holding Chongqing Shunbo Aluminum or generate 3.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Shunbo Aluminum vs. Shandong Hongchuang Aluminum
Performance |
| Timeline |
| Chongqing Shunbo Aluminum |
| Shandong Hongchuang |
Chongqing Shunbo and Shandong Hongchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Shunbo and Shandong Hongchuang
The main advantage of trading using opposite Chongqing Shunbo and Shandong Hongchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Shunbo position performs unexpectedly, Shandong Hongchuang 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 Hongchuang will offset losses from the drop in Shandong Hongchuang's long position.| Chongqing Shunbo vs. Shanghai Jinfeng Wine | Chongqing Shunbo vs. Hubei Forbon Technology | Chongqing Shunbo vs. Guangzhou KingTeller Technology | Chongqing Shunbo vs. ROPEOK Technology Group |
| Shandong Hongchuang vs. Dareway Software Co | Shandong Hongchuang vs. Anji Foodstuff Co | Shandong Hongchuang vs. Beijing Yanjing Brewery | Shandong Hongchuang vs. Yankershop Food 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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