Correlation Between Shandong Sanyuan and Anhui Fuhuang
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By analyzing existing cross correlation between Shandong Sanyuan Biotechnology and Anhui Fuhuang Steel, you can compare the effects of market volatilities on Shandong Sanyuan and Anhui Fuhuang 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 Sanyuan with a short position of Anhui Fuhuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Sanyuan and Anhui Fuhuang.
Diversification Opportunities for Shandong Sanyuan and Anhui Fuhuang
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shandong and Anhui is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Sanyuan Biotechnology and Anhui Fuhuang Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Fuhuang Steel and Shandong Sanyuan 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 Sanyuan Biotechnology are associated (or correlated) with Anhui Fuhuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Fuhuang Steel has no effect on the direction of Shandong Sanyuan i.e., Shandong Sanyuan and Anhui Fuhuang go up and down completely randomly.
Pair Corralation between Shandong Sanyuan and Anhui Fuhuang
If you would invest 2,481 in Shandong Sanyuan Biotechnology on November 9, 2024 and sell it today you would earn a total of 87.00 from holding Shandong Sanyuan Biotechnology or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 6.25% |
| Values | Daily Returns |
Shandong Sanyuan Biotechnology vs. Anhui Fuhuang Steel
Performance |
| Timeline |
| Shandong Sanyuan Bio |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Anhui Fuhuang Steel |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Shandong Sanyuan and Anhui Fuhuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Sanyuan and Anhui Fuhuang
The main advantage of trading using opposite Shandong Sanyuan and Anhui Fuhuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Sanyuan position performs unexpectedly, Anhui Fuhuang 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 Anhui Fuhuang will offset losses from the drop in Anhui Fuhuang's long position.The idea behind Shandong Sanyuan Biotechnology and Anhui Fuhuang Steel pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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