Correlation Between Sichuan Qiaoyuan and Shenzhen Hans
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By analyzing existing cross correlation between Sichuan Qiaoyuan Gas and Shenzhen Hans CNC, you can compare the effects of market volatilities on Sichuan Qiaoyuan and Shenzhen Hans 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 Sichuan Qiaoyuan with a short position of Shenzhen Hans. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Qiaoyuan and Shenzhen Hans.
Diversification Opportunities for Sichuan Qiaoyuan and Shenzhen Hans
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sichuan and Shenzhen is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Qiaoyuan Gas and Shenzhen Hans CNC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Hans CNC and Sichuan Qiaoyuan 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 Sichuan Qiaoyuan Gas are associated (or correlated) with Shenzhen Hans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Hans CNC has no effect on the direction of Sichuan Qiaoyuan i.e., Sichuan Qiaoyuan and Shenzhen Hans go up and down completely randomly.
Pair Corralation between Sichuan Qiaoyuan and Shenzhen Hans
Assuming the 90 days trading horizon Sichuan Qiaoyuan Gas is expected to under-perform the Shenzhen Hans. But the stock apears to be less risky and, when comparing its historical volatility, Sichuan Qiaoyuan Gas is 1.22 times less risky than Shenzhen Hans. The stock trades about -0.19 of its potential returns per unit of risk. The Shenzhen Hans CNC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,708 in Shenzhen Hans CNC on October 31, 2024 and sell it today you would earn a total of 98.00 from holding Shenzhen Hans CNC or generate 2.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Qiaoyuan Gas vs. Shenzhen Hans CNC
Performance |
| Timeline |
| Sichuan Qiaoyuan Gas |
| Shenzhen Hans CNC |
Sichuan Qiaoyuan and Shenzhen Hans Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Qiaoyuan and Shenzhen Hans
The main advantage of trading using opposite Sichuan Qiaoyuan and Shenzhen Hans positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Qiaoyuan position performs unexpectedly, Shenzhen Hans 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 Shenzhen Hans will offset losses from the drop in Shenzhen Hans' long position.| Sichuan Qiaoyuan vs. CITIC Metal Co | Sichuan Qiaoyuan vs. Western Metal Materials | Sichuan Qiaoyuan vs. Offshore Oil Engineering | Sichuan Qiaoyuan vs. Heilongjiang Transport Development |
| Shenzhen Hans vs. China Asset Management | Shenzhen Hans vs. Zhongshan Broad Ocean Motor | Shenzhen Hans vs. Harson Trading China | Shenzhen Hans vs. Zhengping RoadBridge Constr |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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