Correlation Between Shandong Sino-Agri and Shandong Xinhua
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By analyzing existing cross correlation between Shandong Sino Agri United and Shandong Xinhua Pharmaceutical, you can compare the effects of market volatilities on Shandong Sino-Agri and Shandong Xinhua 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 Shandong Sino-Agri with a short position of Shandong Xinhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Sino-Agri and Shandong Xinhua.
Diversification Opportunities for Shandong Sino-Agri and Shandong Xinhua
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Shandong is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Sino Agri United and Shandong Xinhua Pharmaceutical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Xinhua Phar and Shandong Sino-Agri 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 Shandong Sino Agri United are associated (or correlated) with Shandong Xinhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Xinhua Phar has no effect on the direction of Shandong Sino-Agri i.e., Shandong Sino-Agri and Shandong Xinhua go up and down completely randomly.
Pair Corralation between Shandong Sino-Agri and Shandong Xinhua
Assuming the 90 days trading horizon Shandong Sino Agri United is expected to generate 1.47 times more return on investment than Shandong Xinhua. However, Shandong Sino-Agri is 1.47 times more volatile than Shandong Xinhua Pharmaceutical. It trades about 0.22 of its potential returns per unit of risk. Shandong Xinhua Pharmaceutical is currently generating about 0.09 per unit of risk. If you would invest 1,139 in Shandong Sino Agri United on September 2, 2024 and sell it today you would earn a total of 658.00 from holding Shandong Sino Agri United or generate 57.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Sino Agri United vs. Shandong Xinhua Pharmaceutical
Performance |
| Timeline |
| Shandong Sino Agri |
| Shandong Xinhua Phar |
Shandong Sino-Agri and Shandong Xinhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Sino-Agri and Shandong Xinhua
The main advantage of trading using opposite Shandong Sino-Agri and Shandong Xinhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Sino-Agri position performs unexpectedly, Shandong Xinhua 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 Xinhua will offset losses from the drop in Shandong Xinhua's long position.| Shandong Sino-Agri vs. Zijin Mining Group | Shandong Sino-Agri vs. Wanhua Chemical Group | Shandong Sino-Agri vs. Baoshan Iron Steel | Shandong Sino-Agri vs. Shandong Gold Mining |
| Shandong Xinhua vs. JiShi Media Co | Shandong Xinhua vs. Guangdong Silvere Sci | Shandong Xinhua vs. Fujian Oriental Silver | Shandong Xinhua vs. Tianjin Silvery Dragon |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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