Correlation Between Shanxi Lanhua and Chengdu B
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By analyzing existing cross correlation between Shanxi Lanhua Sci Tech and Chengdu B ray Media, you can compare the effects of market volatilities on Shanxi Lanhua and Chengdu B 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 Chengdu B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanxi Lanhua and Chengdu B.
Diversification Opportunities for Shanxi Lanhua and Chengdu B
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanxi and Chengdu is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Shanxi Lanhua Sci Tech and Chengdu B ray Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu B ray 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 Chengdu B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu B ray has no effect on the direction of Shanxi Lanhua i.e., Shanxi Lanhua and Chengdu B go up and down completely randomly.
Pair Corralation between Shanxi Lanhua and Chengdu B
Assuming the 90 days trading horizon Shanxi Lanhua Sci Tech is expected to under-perform the Chengdu B. But the stock apears to be less risky and, when comparing its historical volatility, Shanxi Lanhua Sci Tech is 1.17 times less risky than Chengdu B. The stock trades about -0.03 of its potential returns per unit of risk. The Chengdu B ray Media is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 427.00 in Chengdu B ray Media on September 3, 2024 and sell it today you would earn a total of 82.00 from holding Chengdu B ray Media or generate 19.2% 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. Chengdu B ray Media
Performance |
| Timeline |
| Shanxi Lanhua Sci |
| Chengdu B ray |
Shanxi Lanhua and Chengdu B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanxi Lanhua and Chengdu B
The main advantage of trading using opposite Shanxi Lanhua and Chengdu B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanxi Lanhua position performs unexpectedly, Chengdu B 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 Chengdu B will offset losses from the drop in Chengdu B's long position.| Shanxi Lanhua vs. Gansu Jiu Steel | Shanxi Lanhua vs. Ming Yang Smart | Shanxi Lanhua vs. Aba Chemicals Corp | Shanxi Lanhua vs. Loctek Ergonomic Technology |
| Chengdu B vs. Gansu Jiu Steel | Chengdu B vs. Ming Yang Smart | Chengdu B vs. Aba Chemicals Corp | Chengdu B vs. Loctek Ergonomic 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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