Correlation Between Shandong Sanyuan and Wuhan Yangtze
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By analyzing existing cross correlation between Shandong Sanyuan Biotechnology and Wuhan Yangtze Communication, you can compare the effects of market volatilities on Shandong Sanyuan and Wuhan Yangtze 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 Wuhan Yangtze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Sanyuan and Wuhan Yangtze.
Diversification Opportunities for Shandong Sanyuan and Wuhan Yangtze
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Wuhan is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Sanyuan Biotechnology and Wuhan Yangtze Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Yangtze Commun 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 Wuhan Yangtze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Yangtze Commun has no effect on the direction of Shandong Sanyuan i.e., Shandong Sanyuan and Wuhan Yangtze go up and down completely randomly.
Pair Corralation between Shandong Sanyuan and Wuhan Yangtze
Assuming the 90 days trading horizon Shandong Sanyuan is expected to generate 61.52 times less return on investment than Wuhan Yangtze. But when comparing it to its historical volatility, Shandong Sanyuan Biotechnology is 3.73 times less risky than Wuhan Yangtze. It trades about 0.02 of its potential returns per unit of risk. Wuhan Yangtze Communication is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,941 in Wuhan Yangtze Communication on September 1, 2024 and sell it today you would earn a total of 1,028 from holding Wuhan Yangtze Communication or generate 52.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shandong Sanyuan Biotechnology vs. Wuhan Yangtze Communication
Performance |
| Timeline |
| Shandong Sanyuan Bio |
| Wuhan Yangtze Commun |
Shandong Sanyuan and Wuhan Yangtze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Sanyuan and Wuhan Yangtze
The main advantage of trading using opposite Shandong Sanyuan and Wuhan Yangtze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Sanyuan position performs unexpectedly, Wuhan Yangtze 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 Wuhan Yangtze will offset losses from the drop in Wuhan Yangtze's long position.| Shandong Sanyuan vs. Jointo Energy Investment | Shandong Sanyuan vs. Hubei Geoway Investment | Shandong Sanyuan vs. Henan Shuanghui Investment | Shandong Sanyuan vs. Cultural Investment Holdings |
| Wuhan Yangtze vs. Industrial and Commercial | Wuhan Yangtze vs. Kweichow Moutai Co | Wuhan Yangtze vs. Agricultural Bank of | Wuhan Yangtze vs. China Mobile Limited |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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