Correlation Between Shandong Iron and Lecron Energy
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By analyzing existing cross correlation between Shandong Iron and and Lecron Energy Saving, you can compare the effects of market volatilities on Shandong Iron and Lecron Energy 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 Iron with a short position of Lecron Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Iron and Lecron Energy.
Diversification Opportunities for Shandong Iron and Lecron Energy
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Lecron is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Iron and and Lecron Energy Saving in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lecron Energy Saving and Shandong Iron 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 Iron and are associated (or correlated) with Lecron Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lecron Energy Saving has no effect on the direction of Shandong Iron i.e., Shandong Iron and Lecron Energy go up and down completely randomly.
Pair Corralation between Shandong Iron and Lecron Energy
Assuming the 90 days trading horizon Shandong Iron and is expected to generate 0.4 times more return on investment than Lecron Energy. However, Shandong Iron and is 2.48 times less risky than Lecron Energy. It trades about -0.01 of its potential returns per unit of risk. Lecron Energy Saving is currently generating about -0.01 per unit of risk. If you would invest 152.00 in Shandong Iron and on October 25, 2024 and sell it today you would lose (16.00) from holding Shandong Iron and or give up 10.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Iron and vs. Lecron Energy Saving
Performance |
| Timeline |
| Shandong Iron |
| Lecron Energy Saving |
Shandong Iron and Lecron Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Iron and Lecron Energy
The main advantage of trading using opposite Shandong Iron and Lecron Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Iron position performs unexpectedly, Lecron Energy 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 Lecron Energy will offset losses from the drop in Lecron Energy's long position.| Shandong Iron vs. Zijin Mining Group | Shandong Iron vs. Wanhua Chemical Group | Shandong Iron vs. Baoshan Iron Steel | Shandong Iron vs. Rongsheng Petrochemical Co |
| Lecron Energy vs. Changchun Engley Automobile | Lecron Energy vs. Eyebright Medical Technology | Lecron Energy vs. Touchstone International Medical | Lecron Energy vs. Allgens Medical Technology |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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