Correlation Between Shandong Sino-Agri and Jiugui Liquor
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By analyzing existing cross correlation between Shandong Sino Agri United and Jiugui Liquor Co, you can compare the effects of market volatilities on Shandong Sino-Agri and Jiugui Liquor 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 Jiugui Liquor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Sino-Agri and Jiugui Liquor.
Diversification Opportunities for Shandong Sino-Agri and Jiugui Liquor
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shandong and Jiugui is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Sino Agri United and Jiugui Liquor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiugui Liquor 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 Jiugui Liquor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiugui Liquor has no effect on the direction of Shandong Sino-Agri i.e., Shandong Sino-Agri and Jiugui Liquor go up and down completely randomly.
Pair Corralation between Shandong Sino-Agri and Jiugui Liquor
Assuming the 90 days trading horizon Shandong Sino Agri United is expected to generate 1.16 times more return on investment than Jiugui Liquor. However, Shandong Sino-Agri is 1.16 times more volatile than Jiugui Liquor Co. It trades about 0.3 of its potential returns per unit of risk. Jiugui Liquor Co is currently generating about 0.24 per unit of risk. If you would invest 1,409 in Shandong Sino Agri United on September 1, 2024 and sell it today you would earn a total of 388.00 from holding Shandong Sino Agri United or generate 27.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Sino Agri United vs. Jiugui Liquor Co
Performance |
| Timeline |
| Shandong Sino Agri |
| Jiugui Liquor |
Shandong Sino-Agri and Jiugui Liquor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Sino-Agri and Jiugui Liquor
The main advantage of trading using opposite Shandong Sino-Agri and Jiugui Liquor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Sino-Agri position performs unexpectedly, Jiugui Liquor 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 Jiugui Liquor will offset losses from the drop in Jiugui Liquor'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 |
| Jiugui Liquor vs. Ningbo Jintian Copper | Jiugui Liquor vs. Dalian Thermal Power | Jiugui Liquor vs. Shengda Mining Co | Jiugui Liquor vs. Westone Information Industry |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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