Correlation Between State Grid and Shandong Longquan
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By analyzing existing cross correlation between State Grid InformationCommunication and Shandong Longquan Pipeline, you can compare the effects of market volatilities on State Grid and Shandong Longquan 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 Shandong Longquan. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Grid and Shandong Longquan.
Diversification Opportunities for State Grid and Shandong Longquan
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between State and Shandong is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding State Grid InformationCommunic and Shandong Longquan Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Longquan 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 Shandong Longquan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Longquan has no effect on the direction of State Grid i.e., State Grid and Shandong Longquan go up and down completely randomly.
Pair Corralation between State Grid and Shandong Longquan
Assuming the 90 days trading horizon State Grid is expected to generate 1.39 times less return on investment than Shandong Longquan. But when comparing it to its historical volatility, State Grid InformationCommunication is 1.02 times less risky than Shandong Longquan. It trades about 0.13 of its potential returns per unit of risk. Shandong Longquan Pipeline is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 362.00 in Shandong Longquan Pipeline on August 26, 2024 and sell it today you would earn a total of 93.00 from holding Shandong Longquan Pipeline or generate 25.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Grid InformationCommunic vs. Shandong Longquan Pipeline
Performance |
| Timeline |
| State Grid Informati |
| Shandong Longquan |
State Grid and Shandong Longquan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Grid and Shandong Longquan
The main advantage of trading using opposite State Grid and Shandong Longquan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Grid position performs unexpectedly, Shandong Longquan 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 Shandong Longquan will offset losses from the drop in Shandong Longquan's long position.| State Grid vs. Kweichow Moutai Co | State Grid vs. NAURA Technology Group | State Grid vs. APT Medical | State Grid vs. BYD Co Ltd |
| Shandong Longquan vs. Zijin Mining Group | Shandong Longquan vs. Wanhua Chemical Group | Shandong Longquan vs. Baoshan Iron Steel | Shandong Longquan vs. Shandong Gold Mining |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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