Correlation Between Chongqing Shunbo and Sinosteel Luonai
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By analyzing existing cross correlation between Chongqing Shunbo Aluminum and Sinosteel Luonai Materials, you can compare the effects of market volatilities on Chongqing Shunbo and Sinosteel Luonai 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 Sinosteel Luonai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Shunbo and Sinosteel Luonai.
Diversification Opportunities for Chongqing Shunbo and Sinosteel Luonai
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chongqing and Sinosteel is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Shunbo Aluminum and Sinosteel Luonai Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinosteel Luonai Mat 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 Sinosteel Luonai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinosteel Luonai Mat has no effect on the direction of Chongqing Shunbo i.e., Chongqing Shunbo and Sinosteel Luonai go up and down completely randomly.
Pair Corralation between Chongqing Shunbo and Sinosteel Luonai
Assuming the 90 days trading horizon Chongqing Shunbo Aluminum is expected to generate 1.66 times more return on investment than Sinosteel Luonai. However, Chongqing Shunbo is 1.66 times more volatile than Sinosteel Luonai Materials. It trades about 0.13 of its potential returns per unit of risk. Sinosteel Luonai Materials is currently generating about 0.22 per unit of risk. If you would invest 644.00 in Chongqing Shunbo Aluminum on November 29, 2024 and sell it today you would earn a total of 20.00 from holding Chongqing Shunbo Aluminum or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Shunbo Aluminum vs. Sinosteel Luonai Materials
Performance |
| Timeline |
| Chongqing Shunbo Aluminum |
| Sinosteel Luonai Mat |
Chongqing Shunbo and Sinosteel Luonai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Shunbo and Sinosteel Luonai
The main advantage of trading using opposite Chongqing Shunbo and Sinosteel Luonai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Shunbo position performs unexpectedly, Sinosteel Luonai 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 Sinosteel Luonai will offset losses from the drop in Sinosteel Luonai's long position.| Chongqing Shunbo vs. Liaoning Dingjide Petrochemical | Chongqing Shunbo vs. Xinxiang Chemical Fiber | Chongqing Shunbo vs. Ziel Home Furnishing | Chongqing Shunbo vs. Jason Furniture |
| Sinosteel Luonai vs. Biwin Storage Technology | Sinosteel Luonai vs. Jinxiandai Information Industry | Sinosteel Luonai vs. Shenzhen SDG Information | Sinosteel Luonai vs. iSoftStone Information Technology |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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