Correlation Between State Grid and Shenyang Chemical
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By analyzing existing cross correlation between State Grid InformationCommunication and Shenyang Chemical Industry, you can compare the effects of market volatilities on State Grid and Shenyang Chemical 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 State Grid with a short position of Shenyang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Grid and Shenyang Chemical.
Diversification Opportunities for State Grid and Shenyang Chemical
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between State and Shenyang is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding State Grid InformationCommunic and Shenyang Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang Chemical and State Grid 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 State Grid InformationCommunication are associated (or correlated) with Shenyang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenyang Chemical has no effect on the direction of State Grid i.e., State Grid and Shenyang Chemical go up and down completely randomly.
Pair Corralation between State Grid and Shenyang Chemical
Assuming the 90 days trading horizon State Grid InformationCommunication is expected to generate 0.47 times more return on investment than Shenyang Chemical. However, State Grid InformationCommunication is 2.13 times less risky than Shenyang Chemical. It trades about -0.26 of its potential returns per unit of risk. Shenyang Chemical Industry is currently generating about -0.18 per unit of risk. If you would invest 2,013 in State Grid InformationCommunication on October 17, 2024 and sell it today you would lose (207.00) from holding State Grid InformationCommunication or give up 10.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Grid InformationCommunic vs. Shenyang Chemical Industry
Performance |
| Timeline |
| State Grid Informati |
| Shenyang Chemical |
State Grid and Shenyang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Grid and Shenyang Chemical
The main advantage of trading using opposite State Grid and Shenyang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Grid position performs unexpectedly, Shenyang Chemical 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 Shenyang Chemical will offset losses from the drop in Shenyang Chemical's long position.| State Grid vs. Anhui Transport Consulting | State Grid vs. China Aluminum International | State Grid vs. Rising Nonferrous Metals | State Grid vs. Shanghai Yanpu Metal |
| Shenyang Chemical vs. Tongyu Communication | Shenyang Chemical vs. State Grid InformationCommunication | Shenyang Chemical vs. Qingdao Foods Co | Shenyang Chemical vs. Dongfeng Automobile 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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