Correlation Between Shandong Ruifeng and Changchun Faway
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By analyzing existing cross correlation between Shandong Ruifeng Chemical and Changchun Faway Automobile, you can compare the effects of market volatilities on Shandong Ruifeng and Changchun Faway 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 Ruifeng with a short position of Changchun Faway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Ruifeng and Changchun Faway.
Diversification Opportunities for Shandong Ruifeng and Changchun Faway
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shandong and Changchun is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Ruifeng Chemical and Changchun Faway Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun Faway Auto and Shandong Ruifeng 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 Ruifeng Chemical are associated (or correlated) with Changchun Faway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun Faway Auto has no effect on the direction of Shandong Ruifeng i.e., Shandong Ruifeng and Changchun Faway go up and down completely randomly.
Pair Corralation between Shandong Ruifeng and Changchun Faway
Assuming the 90 days trading horizon Shandong Ruifeng Chemical is expected to generate 1.63 times more return on investment than Changchun Faway. However, Shandong Ruifeng is 1.63 times more volatile than Changchun Faway Automobile. It trades about 0.04 of its potential returns per unit of risk. Changchun Faway Automobile is currently generating about 0.02 per unit of risk. If you would invest 860.00 in Shandong Ruifeng Chemical on August 24, 2024 and sell it today you would earn a total of 398.00 from holding Shandong Ruifeng Chemical or generate 46.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Ruifeng Chemical vs. Changchun Faway Automobile
Performance |
| Timeline |
| Shandong Ruifeng Chemical |
| Changchun Faway Auto |
Shandong Ruifeng and Changchun Faway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Ruifeng and Changchun Faway
The main advantage of trading using opposite Shandong Ruifeng and Changchun Faway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Ruifeng position performs unexpectedly, Changchun Faway 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 Changchun Faway will offset losses from the drop in Changchun Faway's long position.| Shandong Ruifeng vs. Beijing SPC Environment | Shandong Ruifeng vs. Tongyu Communication | Shandong Ruifeng vs. GreenTech Environmental Co | Shandong Ruifeng vs. Sichuan Jinshi Technology |
| Changchun Faway vs. Shenzhen Zhongzhuang Construction | Changchun Faway vs. Kuangda Technology Group | Changchun Faway vs. Glodon Software Co | Changchun Faway vs. Hubei Forbon Technology |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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