Correlation Between Shanxi Lanhua and Threes Company
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By analyzing existing cross correlation between Shanxi Lanhua Sci Tech and Threes Company Media, you can compare the effects of market volatilities on Shanxi Lanhua and Threes Company 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 Threes Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanxi Lanhua and Threes Company.
Diversification Opportunities for Shanxi Lanhua and Threes Company
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanxi and Threes is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shanxi Lanhua Sci Tech and Threes Company Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Threes Company 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 Threes Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Threes Company has no effect on the direction of Shanxi Lanhua i.e., Shanxi Lanhua and Threes Company go up and down completely randomly.
Pair Corralation between Shanxi Lanhua and Threes Company
Assuming the 90 days trading horizon Shanxi Lanhua is expected to generate 10.07 times less return on investment than Threes Company. But when comparing it to its historical volatility, Shanxi Lanhua Sci Tech is 1.42 times less risky than Threes Company. It trades about 0.02 of its potential returns per unit of risk. Threes Company Media is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,480 in Threes Company Media on September 2, 2024 and sell it today you would earn a total of 1,014 from holding Threes Company Media or generate 40.89% 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. Threes Company Media
Performance |
| Timeline |
| Shanxi Lanhua Sci |
| Threes Company |
Shanxi Lanhua and Threes Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanxi Lanhua and Threes Company
The main advantage of trading using opposite Shanxi Lanhua and Threes Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanxi Lanhua position performs unexpectedly, Threes Company 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 Threes Company will offset losses from the drop in Threes Company's 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 |
| Threes Company vs. Ming Yang Smart | Threes Company vs. 159681 | Threes Company vs. 159005 | Threes Company 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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