Correlation Between Shandong Rike and Beijing Enlight
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By analyzing existing cross correlation between Shandong Rike Chemical and Beijing Enlight Media, you can compare the effects of market volatilities on Shandong Rike and Beijing Enlight 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 Rike with a short position of Beijing Enlight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Rike and Beijing Enlight.
Diversification Opportunities for Shandong Rike and Beijing Enlight
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shandong and Beijing is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Rike Chemical and Beijing Enlight Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Enlight Media and Shandong Rike 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 Rike Chemical are associated (or correlated) with Beijing Enlight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Enlight Media has no effect on the direction of Shandong Rike i.e., Shandong Rike and Beijing Enlight go up and down completely randomly.
Pair Corralation between Shandong Rike and Beijing Enlight
Assuming the 90 days trading horizon Shandong Rike Chemical is expected to generate 1.81 times more return on investment than Beijing Enlight. However, Shandong Rike is 1.81 times more volatile than Beijing Enlight Media. It trades about 0.0 of its potential returns per unit of risk. Beijing Enlight Media is currently generating about -0.01 per unit of risk. If you would invest 575.00 in Shandong Rike Chemical on October 28, 2024 and sell it today you would lose (10.00) from holding Shandong Rike Chemical or give up 1.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Rike Chemical vs. Beijing Enlight Media
Performance |
| Timeline |
| Shandong Rike Chemical |
| Beijing Enlight Media |
Shandong Rike and Beijing Enlight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Rike and Beijing Enlight
The main advantage of trading using opposite Shandong Rike and Beijing Enlight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Rike position performs unexpectedly, Beijing Enlight 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 Beijing Enlight will offset losses from the drop in Beijing Enlight's long position.| Shandong Rike vs. Fuzhou Rockchip Electronics | Shandong Rike vs. Senci Electric Machinery | Shandong Rike vs. Gifore Agricultural Machinery | Shandong Rike vs. Eastern Air Logistics |
| Beijing Enlight vs. China State Construction | Beijing Enlight vs. Poly Real Estate | Beijing Enlight vs. China Vanke Co | Beijing Enlight vs. China Merchants Shekou |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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