Correlation Between Shandong Rike and Guangdong Xiongsu
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By analyzing existing cross correlation between Shandong Rike Chemical and Guangdong Xiongsu Technology, you can compare the effects of market volatilities on Shandong Rike and Guangdong Xiongsu 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 Guangdong Xiongsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Rike and Guangdong Xiongsu.
Diversification Opportunities for Shandong Rike and Guangdong Xiongsu
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shandong and Guangdong is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Rike Chemical and Guangdong Xiongsu Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Xiongsu 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 Guangdong Xiongsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Xiongsu has no effect on the direction of Shandong Rike i.e., Shandong Rike and Guangdong Xiongsu go up and down completely randomly.
Pair Corralation between Shandong Rike and Guangdong Xiongsu
Assuming the 90 days trading horizon Shandong Rike Chemical is expected to generate 1.36 times more return on investment than Guangdong Xiongsu. However, Shandong Rike is 1.36 times more volatile than Guangdong Xiongsu Technology. It trades about -0.04 of its potential returns per unit of risk. Guangdong Xiongsu Technology is currently generating about -0.26 per unit of risk. If you would invest 590.00 in Shandong Rike Chemical on October 30, 2024 and sell it today you would lose (27.00) from holding Shandong Rike Chemical or give up 4.58% 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. Guangdong Xiongsu Technology
Performance |
| Timeline |
| Shandong Rike Chemical |
| Guangdong Xiongsu |
Shandong Rike and Guangdong Xiongsu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Rike and Guangdong Xiongsu
The main advantage of trading using opposite Shandong Rike and Guangdong Xiongsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Rike position performs unexpectedly, Guangdong Xiongsu 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 Guangdong Xiongsu will offset losses from the drop in Guangdong Xiongsu's long position.| Shandong Rike vs. Zijin Mining Group | Shandong Rike vs. Wanhua Chemical Group | Shandong Rike vs. Baoshan Iron Steel | Shandong Rike vs. Shandong Gold Mining |
| Guangdong Xiongsu vs. Jiangxi Hengda Hi Tech | Guangdong Xiongsu vs. China Sports Industry | Guangdong Xiongsu vs. Beijing Seeyon Internet | Guangdong Xiongsu vs. Kuang Chi Technologies |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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