Correlation Between Shandong Sanyuan and Qijing Machinery
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By analyzing existing cross correlation between Shandong Sanyuan Biotechnology and Qijing Machinery, you can compare the effects of market volatilities on Shandong Sanyuan and Qijing Machinery 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 Qijing Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Sanyuan and Qijing Machinery.
Diversification Opportunities for Shandong Sanyuan and Qijing Machinery
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Qijing is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Sanyuan Biotechnology and Qijing Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qijing Machinery 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 Qijing Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qijing Machinery has no effect on the direction of Shandong Sanyuan i.e., Shandong Sanyuan and Qijing Machinery go up and down completely randomly.
Pair Corralation between Shandong Sanyuan and Qijing Machinery
Assuming the 90 days trading horizon Shandong Sanyuan is expected to generate 2.48 times less return on investment than Qijing Machinery. But when comparing it to its historical volatility, Shandong Sanyuan Biotechnology is 1.04 times less risky than Qijing Machinery. It trades about 0.08 of its potential returns per unit of risk. Qijing Machinery is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 973.00 in Qijing Machinery on August 28, 2024 and sell it today you would earn a total of 327.00 from holding Qijing Machinery or generate 33.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Sanyuan Biotechnology vs. Qijing Machinery
Performance |
| Timeline |
| Shandong Sanyuan Bio |
| Qijing Machinery |
Shandong Sanyuan and Qijing Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Sanyuan and Qijing Machinery
The main advantage of trading using opposite Shandong Sanyuan and Qijing Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Sanyuan position performs unexpectedly, Qijing Machinery 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 Qijing Machinery will offset losses from the drop in Qijing Machinery's long position.| Shandong Sanyuan vs. Wuhan Yangtze Communication | Shandong Sanyuan vs. Runjian Communication Co | Shandong Sanyuan vs. SUNSEA Telecommunications Co | Shandong Sanyuan vs. Gome Telecom Equipment |
| Qijing Machinery vs. Zhejiang Kingland Pipeline | Qijing Machinery vs. XinJiang GuoTong Pipeline | Qijing Machinery vs. Kunwu Jiuding Investment | Qijing Machinery vs. Cultural Investment Holdings |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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