Correlation Between Qinghaihuading Industrial and Shaanxi Construction
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By analyzing existing cross correlation between Qinghaihuading Industrial Co and Shaanxi Construction Machinery, you can compare the effects of market volatilities on Qinghaihuading Industrial and Shaanxi Construction 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 Qinghaihuading Industrial with a short position of Shaanxi Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qinghaihuading Industrial and Shaanxi Construction.
Diversification Opportunities for Qinghaihuading Industrial and Shaanxi Construction
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Qinghaihuading and Shaanxi is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Qinghaihuading Industrial Co and Shaanxi Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Construction and Qinghaihuading Industrial 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 Qinghaihuading Industrial Co are associated (or correlated) with Shaanxi Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Construction has no effect on the direction of Qinghaihuading Industrial i.e., Qinghaihuading Industrial and Shaanxi Construction go up and down completely randomly.
Pair Corralation between Qinghaihuading Industrial and Shaanxi Construction
Assuming the 90 days trading horizon Qinghaihuading Industrial Co is expected to generate 1.02 times more return on investment than Shaanxi Construction. However, Qinghaihuading Industrial is 1.02 times more volatile than Shaanxi Construction Machinery. It trades about 0.03 of its potential returns per unit of risk. Shaanxi Construction Machinery is currently generating about -0.02 per unit of risk. If you would invest 461.00 in Qinghaihuading Industrial Co on September 12, 2024 and sell it today you would earn a total of 121.00 from holding Qinghaihuading Industrial Co or generate 26.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qinghaihuading Industrial Co vs. Shaanxi Construction Machinery
Performance |
| Timeline |
| Qinghaihuading Industrial |
| Shaanxi Construction |
Qinghaihuading Industrial and Shaanxi Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qinghaihuading Industrial and Shaanxi Construction
The main advantage of trading using opposite Qinghaihuading Industrial and Shaanxi Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qinghaihuading Industrial position performs unexpectedly, Shaanxi Construction 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 Shaanxi Construction will offset losses from the drop in Shaanxi Construction's long position.| Qinghaihuading Industrial vs. Agricultural Bank of | Qinghaihuading Industrial vs. Industrial and Commercial | Qinghaihuading Industrial vs. Bank of China | Qinghaihuading Industrial vs. PetroChina Co Ltd |
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 Stocks Directory module to find actively traded stocks across global markets.
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