Correlation Between Shining Building and Sweeten Real
Can any of the company-specific risk be diversified away by investing in both Shining Building and Sweeten Real at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Shining Building and Sweeten Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shining Building Business and Sweeten Real Estate, you can compare the effects of market volatilities on Shining Building and Sweeten Real 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 Shining Building with a short position of Sweeten Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shining Building and Sweeten Real.
Diversification Opportunities for Shining Building and Sweeten Real
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shining and Sweeten is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Shining Building Business and Sweeten Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweeten Real Estate and Shining Building 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 Shining Building Business are associated (or correlated) with Sweeten Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sweeten Real Estate has no effect on the direction of Shining Building i.e., Shining Building and Sweeten Real go up and down completely randomly.
Pair Corralation between Shining Building and Sweeten Real
Assuming the 90 days trading horizon Shining Building Business is expected to under-perform the Sweeten Real. In addition to that, Shining Building is 1.18 times more volatile than Sweeten Real Estate. It trades about -0.01 of its total potential returns per unit of risk. Sweeten Real Estate is currently generating about 0.04 per unit of volatility. If you would invest 2,715 in Sweeten Real Estate on August 31, 2024 and sell it today you would earn a total of 695.00 from holding Sweeten Real Estate or generate 25.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shining Building Business vs. Sweeten Real Estate
Performance |
| Timeline |
| Shining Building Business |
| Sweeten Real Estate |
Shining Building and Sweeten Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shining Building and Sweeten Real
The main advantage of trading using opposite Shining Building and Sweeten Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shining Building position performs unexpectedly, Sweeten Real 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 Sweeten Real will offset losses from the drop in Sweeten Real's long position.| Shining Building vs. Farglory Land Development | Shining Building vs. Radium Life Tech | Shining Building vs. Huaku Development Co | Shining Building vs. Chong Hong Construction |
| Sweeten Real vs. Chong Hong Construction | Sweeten Real vs. Shining Building Business | Sweeten Real vs. Huaku Development Co | Sweeten Real vs. Founding Construction Development |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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