Correlation Between Shanxi Lanhua and Zhejiang Kingland
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By analyzing existing cross correlation between Shanxi Lanhua Sci Tech and Zhejiang Kingland Pipeline, you can compare the effects of market volatilities on Shanxi Lanhua and Zhejiang Kingland 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 Zhejiang Kingland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanxi Lanhua and Zhejiang Kingland.
Diversification Opportunities for Shanxi Lanhua and Zhejiang Kingland
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanxi and Zhejiang is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Shanxi Lanhua Sci Tech and Zhejiang Kingland Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Kingland 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 Zhejiang Kingland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Kingland has no effect on the direction of Shanxi Lanhua i.e., Shanxi Lanhua and Zhejiang Kingland go up and down completely randomly.
Pair Corralation between Shanxi Lanhua and Zhejiang Kingland
Assuming the 90 days trading horizon Shanxi Lanhua Sci Tech is expected to under-perform the Zhejiang Kingland. In addition to that, Shanxi Lanhua is 1.16 times more volatile than Zhejiang Kingland Pipeline. It trades about -0.03 of its total potential returns per unit of risk. Zhejiang Kingland Pipeline is currently generating about 0.05 per unit of volatility. If you would invest 579.00 in Zhejiang Kingland Pipeline on September 1, 2024 and sell it today you would earn a total of 60.00 from holding Zhejiang Kingland Pipeline or generate 10.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanxi Lanhua Sci Tech vs. Zhejiang Kingland Pipeline
Performance |
| Timeline |
| Shanxi Lanhua Sci |
| Zhejiang Kingland |
Shanxi Lanhua and Zhejiang Kingland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanxi Lanhua and Zhejiang Kingland
The main advantage of trading using opposite Shanxi Lanhua and Zhejiang Kingland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanxi Lanhua position performs unexpectedly, Zhejiang Kingland 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 Zhejiang Kingland will offset losses from the drop in Zhejiang Kingland's long position.| Shanxi Lanhua vs. Peoples Insurance of | Shanxi Lanhua vs. Xinjiang Communications Construction | Shanxi Lanhua vs. Sichuan Teway Food | Shanxi Lanhua vs. Suzhou Weizhixiang Food |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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