Correlation Between Shanxi Lanhua and Kangping Technology
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By analyzing existing cross correlation between Shanxi Lanhua Sci Tech and Kangping Technology Co, you can compare the effects of market volatilities on Shanxi Lanhua and Kangping Technology 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 Kangping Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanxi Lanhua and Kangping Technology.
Diversification Opportunities for Shanxi Lanhua and Kangping Technology
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanxi and Kangping is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Shanxi Lanhua Sci Tech and Kangping Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kangping Technology 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 Kangping Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kangping Technology has no effect on the direction of Shanxi Lanhua i.e., Shanxi Lanhua and Kangping Technology go up and down completely randomly.
Pair Corralation between Shanxi Lanhua and Kangping Technology
Assuming the 90 days trading horizon Shanxi Lanhua Sci Tech is expected to under-perform the Kangping Technology. But the stock apears to be less risky and, when comparing its historical volatility, Shanxi Lanhua Sci Tech is 1.25 times less risky than Kangping Technology. The stock trades about -0.03 of its potential returns per unit of risk. The Kangping Technology Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,870 in Kangping Technology Co on September 1, 2024 and sell it today you would earn a total of 510.00 from holding Kangping Technology Co or generate 27.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanxi Lanhua Sci Tech vs. Kangping Technology Co
Performance |
| Timeline |
| Shanxi Lanhua Sci |
| Kangping Technology |
Shanxi Lanhua and Kangping Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanxi Lanhua and Kangping Technology
The main advantage of trading using opposite Shanxi Lanhua and Kangping Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanxi Lanhua position performs unexpectedly, Kangping Technology 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 Kangping Technology will offset losses from the drop in Kangping Technology'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 |
| Kangping Technology vs. Cultural Investment Holdings | Kangping Technology vs. Gome Telecom Equipment | Kangping Technology vs. Bus Online Co | Kangping Technology vs. Holitech Technology Co |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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