Correlation Between Huaneng Lancang and Shandong Iron
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By analyzing existing cross correlation between Huaneng Lancang River and Shandong Iron and, you can compare the effects of market volatilities on Huaneng Lancang and Shandong Iron 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 Huaneng Lancang with a short position of Shandong Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huaneng Lancang and Shandong Iron.
Diversification Opportunities for Huaneng Lancang and Shandong Iron
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Huaneng and Shandong is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Huaneng Lancang River and Shandong Iron and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Iron and Huaneng Lancang 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 Huaneng Lancang River are associated (or correlated) with Shandong Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Iron has no effect on the direction of Huaneng Lancang i.e., Huaneng Lancang and Shandong Iron go up and down completely randomly.
Pair Corralation between Huaneng Lancang and Shandong Iron
Assuming the 90 days trading horizon Huaneng Lancang River is expected to generate 0.64 times more return on investment than Shandong Iron. However, Huaneng Lancang River is 1.55 times less risky than Shandong Iron. It trades about -0.27 of its potential returns per unit of risk. Shandong Iron and is currently generating about -0.31 per unit of risk. If you would invest 958.00 in Huaneng Lancang River on October 20, 2024 and sell it today you would lose (66.00) from holding Huaneng Lancang River or give up 6.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huaneng Lancang River vs. Shandong Iron and
Performance |
| Timeline |
| Huaneng Lancang River |
| Shandong Iron |
Huaneng Lancang and Shandong Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huaneng Lancang and Shandong Iron
The main advantage of trading using opposite Huaneng Lancang and Shandong Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huaneng Lancang position performs unexpectedly, Shandong Iron 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 Iron will offset losses from the drop in Shandong Iron's long position.| Huaneng Lancang vs. Tianshui Huatian Technology | Huaneng Lancang vs. Fuda Alloy Materials | Huaneng Lancang vs. Shanghai Jinfeng Wine | Huaneng Lancang vs. Konfoong Materials International |
| Shandong Iron vs. JiShi Media Co | Shandong Iron vs. Shuhua Sports Co | Shandong Iron vs. Hubei Yingtong Telecommunication | Shandong Iron vs. Anhui Gujing Distillery |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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