Correlation Between Shantou Wanshun and Shenwu Energy
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By analyzing existing cross correlation between Shantou Wanshun Package and Shenwu Energy Saving, you can compare the effects of market volatilities on Shantou Wanshun and Shenwu Energy 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 Shantou Wanshun with a short position of Shenwu Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shantou Wanshun and Shenwu Energy.
Diversification Opportunities for Shantou Wanshun and Shenwu Energy
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shantou and Shenwu is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Shantou Wanshun Package and Shenwu Energy Saving in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenwu Energy Saving and Shantou Wanshun 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 Shantou Wanshun Package are associated (or correlated) with Shenwu Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenwu Energy Saving has no effect on the direction of Shantou Wanshun i.e., Shantou Wanshun and Shenwu Energy go up and down completely randomly.
Pair Corralation between Shantou Wanshun and Shenwu Energy
Assuming the 90 days trading horizon Shantou Wanshun is expected to generate 2.01 times less return on investment than Shenwu Energy. But when comparing it to its historical volatility, Shantou Wanshun Package is 1.08 times less risky than Shenwu Energy. It trades about 0.05 of its potential returns per unit of risk. Shenwu Energy Saving is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 217.00 in Shenwu Energy Saving on October 7, 2024 and sell it today you would earn a total of 92.00 from holding Shenwu Energy Saving or generate 42.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shantou Wanshun Package vs. Shenwu Energy Saving
Performance |
| Timeline |
| Shantou Wanshun Package |
| Shenwu Energy Saving |
Shantou Wanshun and Shenwu Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shantou Wanshun and Shenwu Energy
The main advantage of trading using opposite Shantou Wanshun and Shenwu Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shantou Wanshun position performs unexpectedly, Shenwu Energy 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 Shenwu Energy will offset losses from the drop in Shenwu Energy's long position.| Shantou Wanshun vs. Zijin Mining Group | Shantou Wanshun vs. Wanhua Chemical Group | Shantou Wanshun vs. Baoshan Iron Steel | Shantou Wanshun vs. Rongsheng Petrochemical Co |
| Shenwu Energy vs. BeiGene | Shenwu Energy vs. G bits Network Technology | Shenwu Energy vs. China Mobile Limited | Shenwu Energy vs. Gansu Jiu Steel |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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