Correlation Between Shandong Sanyuan and China Everbright
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By analyzing existing cross correlation between Shandong Sanyuan Biotechnology and China Everbright Bank, you can compare the effects of market volatilities on Shandong Sanyuan and China Everbright 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 China Everbright. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Sanyuan and China Everbright.
Diversification Opportunities for Shandong Sanyuan and China Everbright
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shandong and China is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Sanyuan Biotechnology and China Everbright Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Everbright Bank 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 China Everbright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Everbright Bank has no effect on the direction of Shandong Sanyuan i.e., Shandong Sanyuan and China Everbright go up and down completely randomly.
Pair Corralation between Shandong Sanyuan and China Everbright
Assuming the 90 days trading horizon Shandong Sanyuan is expected to generate 1.57 times less return on investment than China Everbright. In addition to that, Shandong Sanyuan is 1.51 times more volatile than China Everbright Bank. It trades about 0.06 of its total potential returns per unit of risk. China Everbright Bank is currently generating about 0.14 per unit of volatility. If you would invest 305.00 in China Everbright Bank on October 18, 2024 and sell it today you would earn a total of 64.00 from holding China Everbright Bank or generate 20.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Sanyuan Biotechnology vs. China Everbright Bank
Performance |
| Timeline |
| Shandong Sanyuan Bio |
| China Everbright Bank |
Shandong Sanyuan and China Everbright Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Sanyuan and China Everbright
The main advantage of trading using opposite Shandong Sanyuan and China Everbright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Sanyuan position performs unexpectedly, China Everbright 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 China Everbright will offset losses from the drop in China Everbright's long position.| Shandong Sanyuan vs. Xilong Chemical Co | Shandong Sanyuan vs. Dosilicon Co | Shandong Sanyuan vs. Xinjiang Baodi Mining | Shandong Sanyuan vs. Dymatic Chemicals |
| China Everbright vs. Ningbo MedicalSystem Biotechnology | China Everbright vs. Shandong Sanyuan Biotechnology | China Everbright vs. Kuang Chi Technologies | China Everbright vs. Eastern Air Logistics |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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