Correlation Between Shandong Sinocera and Shenzhen SDG
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By analyzing existing cross correlation between Shandong Sinocera Func and Shenzhen SDG Information, you can compare the effects of market volatilities on Shandong Sinocera and Shenzhen SDG 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 Sinocera with a short position of Shenzhen SDG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Sinocera and Shenzhen SDG.
Diversification Opportunities for Shandong Sinocera and Shenzhen SDG
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Shenzhen is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Sinocera Func and Shenzhen SDG Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen SDG Information and Shandong Sinocera 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 Sinocera Func are associated (or correlated) with Shenzhen SDG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen SDG Information has no effect on the direction of Shandong Sinocera i.e., Shandong Sinocera and Shenzhen SDG go up and down completely randomly.
Pair Corralation between Shandong Sinocera and Shenzhen SDG
Assuming the 90 days trading horizon Shandong Sinocera Func is expected to under-perform the Shenzhen SDG. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Sinocera Func is 1.15 times less risky than Shenzhen SDG. The stock trades about -0.04 of its potential returns per unit of risk. The Shenzhen SDG Information is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 570.00 in Shenzhen SDG Information on September 1, 2024 and sell it today you would earn a total of 16.00 from holding Shenzhen SDG Information or generate 2.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shandong Sinocera Func vs. Shenzhen SDG Information
Performance |
| Timeline |
| Shandong Sinocera Func |
| Shenzhen SDG Information |
Shandong Sinocera and Shenzhen SDG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Sinocera and Shenzhen SDG
The main advantage of trading using opposite Shandong Sinocera and Shenzhen SDG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Sinocera position performs unexpectedly, Shenzhen SDG 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 Shenzhen SDG will offset losses from the drop in Shenzhen SDG's long position.| Shandong Sinocera vs. CITIC Guoan Information | Shandong Sinocera vs. Hunan Tyen Machinery | Shandong Sinocera vs. Focus Media Information | Shandong Sinocera vs. Hangzhou Gisway Information |
| Shenzhen SDG vs. Xiangtan Electrochemical Scientific | Shenzhen SDG vs. Eastroc Beverage Group | Shenzhen SDG vs. Gan Yuan Foods | Shenzhen SDG vs. Xiwang Foodstuffs Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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