Correlation Between Techshine Electronics and Shandong Polymer
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By analyzing existing cross correlation between Techshine Electronics Co and Shandong Polymer Biochemicals, you can compare the effects of market volatilities on Techshine Electronics and Shandong Polymer 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 Techshine Electronics with a short position of Shandong Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techshine Electronics and Shandong Polymer.
Diversification Opportunities for Techshine Electronics and Shandong Polymer
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Techshine and Shandong is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Techshine Electronics Co and Shandong Polymer Biochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Polymer Bio and Techshine Electronics 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 Techshine Electronics Co are associated (or correlated) with Shandong Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Polymer Bio has no effect on the direction of Techshine Electronics i.e., Techshine Electronics and Shandong Polymer go up and down completely randomly.
Pair Corralation between Techshine Electronics and Shandong Polymer
Assuming the 90 days trading horizon Techshine Electronics Co is expected to generate 1.48 times more return on investment than Shandong Polymer. However, Techshine Electronics is 1.48 times more volatile than Shandong Polymer Biochemicals. It trades about 0.12 of its potential returns per unit of risk. Shandong Polymer Biochemicals is currently generating about 0.11 per unit of risk. If you would invest 1,979 in Techshine Electronics Co on November 3, 2024 and sell it today you would earn a total of 120.00 from holding Techshine Electronics Co or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Techshine Electronics Co vs. Shandong Polymer Biochemicals
Performance |
| Timeline |
| Techshine Electronics |
| Shandong Polymer Bio |
Techshine Electronics and Shandong Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Techshine Electronics and Shandong Polymer
The main advantage of trading using opposite Techshine Electronics and Shandong Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techshine Electronics position performs unexpectedly, Shandong Polymer 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 Shandong Polymer will offset losses from the drop in Shandong Polymer's long position.The idea behind Techshine Electronics Co and Shandong Polymer Biochemicals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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