Correlation Between Shandong Sanyuan and Anhui Huaheng
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By analyzing existing cross correlation between Shandong Sanyuan Biotechnology and Anhui Huaheng Biotechnology, you can compare the effects of market volatilities on Shandong Sanyuan and Anhui Huaheng 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 Anhui Huaheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Sanyuan and Anhui Huaheng.
Diversification Opportunities for Shandong Sanyuan and Anhui Huaheng
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Anhui is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Sanyuan Biotechnology and Anhui Huaheng Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Huaheng Biotec 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 Anhui Huaheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Huaheng Biotec has no effect on the direction of Shandong Sanyuan i.e., Shandong Sanyuan and Anhui Huaheng go up and down completely randomly.
Pair Corralation between Shandong Sanyuan and Anhui Huaheng
Assuming the 90 days trading horizon Shandong Sanyuan Biotechnology is expected to generate 1.07 times more return on investment than Anhui Huaheng. However, Shandong Sanyuan is 1.07 times more volatile than Anhui Huaheng Biotechnology. It trades about -0.23 of its potential returns per unit of risk. Anhui Huaheng Biotechnology is currently generating about -0.46 per unit of risk. If you would invest 2,845 in Shandong Sanyuan Biotechnology on October 10, 2024 and sell it today you would lose (340.00) from holding Shandong Sanyuan Biotechnology or give up 11.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Sanyuan Biotechnology vs. Anhui Huaheng Biotechnology
Performance |
| Timeline |
| Shandong Sanyuan Bio |
| Anhui Huaheng Biotec |
Shandong Sanyuan and Anhui Huaheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Sanyuan and Anhui Huaheng
The main advantage of trading using opposite Shandong Sanyuan and Anhui Huaheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Sanyuan position performs unexpectedly, Anhui Huaheng 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 Anhui Huaheng will offset losses from the drop in Anhui Huaheng's long position.| Shandong Sanyuan vs. Mengtian Home Group | Shandong Sanyuan vs. Hangzhou Gisway Information | Shandong Sanyuan vs. Oppein Home Group | Shandong Sanyuan vs. Digital China Information |
| Anhui Huaheng vs. Youngy Health Co | Anhui Huaheng vs. Gem Year Industrial Co | Anhui Huaheng vs. Hengli Industrial Development | Anhui Huaheng vs. Xinjiang Baodi Mining |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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