Correlation Between Shanxi Lanhua and Oriental Times
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By analyzing existing cross correlation between Shanxi Lanhua Sci Tech and Oriental Times Media, you can compare the effects of market volatilities on Shanxi Lanhua and Oriental Times 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 Shanxi Lanhua with a short position of Oriental Times. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanxi Lanhua and Oriental Times.
Diversification Opportunities for Shanxi Lanhua and Oriental Times
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shanxi and Oriental is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Shanxi Lanhua Sci Tech and Oriental Times Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Times Media and Shanxi Lanhua 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 Shanxi Lanhua Sci Tech are associated (or correlated) with Oriental Times. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Times Media has no effect on the direction of Shanxi Lanhua i.e., Shanxi Lanhua and Oriental Times go up and down completely randomly.
Pair Corralation between Shanxi Lanhua and Oriental Times
Assuming the 90 days trading horizon Shanxi Lanhua is expected to generate 26.82 times less return on investment than Oriental Times. But when comparing it to its historical volatility, Shanxi Lanhua Sci Tech is 1.71 times less risky than Oriental Times. It trades about 0.02 of its potential returns per unit of risk. Oriental Times Media is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 172.00 in Oriental Times Media on September 2, 2024 and sell it today you would earn a total of 280.00 from holding Oriental Times Media or generate 162.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanxi Lanhua Sci Tech vs. Oriental Times Media
Performance |
| Timeline |
| Shanxi Lanhua Sci |
| Oriental Times Media |
Shanxi Lanhua and Oriental Times Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanxi Lanhua and Oriental Times
The main advantage of trading using opposite Shanxi Lanhua and Oriental Times positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanxi Lanhua position performs unexpectedly, Oriental Times 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 Oriental Times will offset losses from the drop in Oriental Times' long position.| Shanxi Lanhua vs. Bloomage Biotechnology Corp | Shanxi Lanhua vs. Xinjiang Communications Construction | Shanxi Lanhua vs. Guangdong Advertising Co | Shanxi Lanhua vs. Changchun BCHT Biotechnology |
| Oriental Times vs. Industrial and Commercial | Oriental Times vs. China Construction Bank | Oriental Times vs. Agricultural Bank of | Oriental Times vs. Bank of China |
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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