Correlation Between Shandong Sanyuan and HUAQIN TECHNOLOGY
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By analyzing existing cross correlation between Shandong Sanyuan Biotechnology and HUAQIN TECHNOLOGY LTD, you can compare the effects of market volatilities on Shandong Sanyuan and HUAQIN TECHNOLOGY 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 HUAQIN TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Sanyuan and HUAQIN TECHNOLOGY.
Diversification Opportunities for Shandong Sanyuan and HUAQIN TECHNOLOGY
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shandong and HUAQIN is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Sanyuan Biotechnology and HUAQIN TECHNOLOGY LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUAQIN TECHNOLOGY LTD 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 HUAQIN TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUAQIN TECHNOLOGY LTD has no effect on the direction of Shandong Sanyuan i.e., Shandong Sanyuan and HUAQIN TECHNOLOGY go up and down completely randomly.
Pair Corralation between Shandong Sanyuan and HUAQIN TECHNOLOGY
Assuming the 90 days trading horizon Shandong Sanyuan Biotechnology is expected to under-perform the HUAQIN TECHNOLOGY. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Sanyuan Biotechnology is 1.35 times less risky than HUAQIN TECHNOLOGY. The stock trades about -0.03 of its potential returns per unit of risk. The HUAQIN TECHNOLOGY LTD is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,128 in HUAQIN TECHNOLOGY LTD on October 15, 2024 and sell it today you would earn a total of 1,759 from holding HUAQIN TECHNOLOGY LTD or generate 34.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.8% |
| Values | Daily Returns |
Shandong Sanyuan Biotechnology vs. HUAQIN TECHNOLOGY LTD
Performance |
| Timeline |
| Shandong Sanyuan Bio |
| HUAQIN TECHNOLOGY LTD |
Shandong Sanyuan and HUAQIN TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Sanyuan and HUAQIN TECHNOLOGY
The main advantage of trading using opposite Shandong Sanyuan and HUAQIN TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Sanyuan position performs unexpectedly, HUAQIN TECHNOLOGY 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 HUAQIN TECHNOLOGY will offset losses from the drop in HUAQIN TECHNOLOGY's long position.| Shandong Sanyuan vs. Shenyang Blue Silver | Shandong Sanyuan vs. Harvest Fund Management | Shandong Sanyuan vs. Guangdong Silvere Sci | Shandong Sanyuan vs. Tianjin Silvery Dragon |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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