Correlation Between Shandong Sanyuan and Fujian Wanchen
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By analyzing existing cross correlation between Shandong Sanyuan Biotechnology and Fujian Wanchen Biotechnology, you can compare the effects of market volatilities on Shandong Sanyuan and Fujian Wanchen 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 Fujian Wanchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Sanyuan and Fujian Wanchen.
Diversification Opportunities for Shandong Sanyuan and Fujian Wanchen
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shandong and Fujian is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Sanyuan Biotechnology and Fujian Wanchen Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Wanchen Biote 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 Fujian Wanchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Wanchen Biote has no effect on the direction of Shandong Sanyuan i.e., Shandong Sanyuan and Fujian Wanchen go up and down completely randomly.
Pair Corralation between Shandong Sanyuan and Fujian Wanchen
Assuming the 90 days trading horizon Shandong Sanyuan Biotechnology is expected to under-perform the Fujian Wanchen. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Sanyuan Biotechnology is 1.93 times less risky than Fujian Wanchen. The stock trades about -0.01 of its potential returns per unit of risk. The Fujian Wanchen Biotechnology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,648 in Fujian Wanchen Biotechnology on November 1, 2024 and sell it today you would earn a total of 7,632 from holding Fujian Wanchen Biotechnology or generate 288.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Sanyuan Biotechnology vs. Fujian Wanchen Biotechnology
Performance |
| Timeline |
| Shandong Sanyuan Bio |
| Fujian Wanchen Biote |
Shandong Sanyuan and Fujian Wanchen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Sanyuan and Fujian Wanchen
The main advantage of trading using opposite Shandong Sanyuan and Fujian Wanchen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Sanyuan position performs unexpectedly, Fujian Wanchen 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 Fujian Wanchen will offset losses from the drop in Fujian Wanchen's long position.| Shandong Sanyuan vs. Hainan Mining Co | Shandong Sanyuan vs. Wuhan Hvsen Biotechnology | Shandong Sanyuan vs. Ningbo MedicalSystem Biotechnology | Shandong Sanyuan vs. Soochow Suzhou Industrial |
| Fujian Wanchen vs. Zoy Home Furnishing | Fujian Wanchen vs. Eyebright Medical Technology | Fujian Wanchen vs. HanS Laser Tech | Fujian Wanchen vs. DO Home Collection |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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