Correlation Between Rising Nonferrous and Shandong Homey
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By analyzing existing cross correlation between Rising Nonferrous Metals and Shandong Homey Aquatic, you can compare the effects of market volatilities on Rising Nonferrous and Shandong Homey 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 Rising Nonferrous with a short position of Shandong Homey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rising Nonferrous and Shandong Homey.
Diversification Opportunities for Rising Nonferrous and Shandong Homey
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Rising and Shandong is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Rising Nonferrous Metals and Shandong Homey Aquatic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Homey Aquatic and Rising Nonferrous 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 Rising Nonferrous Metals are associated (or correlated) with Shandong Homey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Homey Aquatic has no effect on the direction of Rising Nonferrous i.e., Rising Nonferrous and Shandong Homey go up and down completely randomly.
Pair Corralation between Rising Nonferrous and Shandong Homey
Assuming the 90 days trading horizon Rising Nonferrous is expected to generate 2.71 times less return on investment than Shandong Homey. But when comparing it to its historical volatility, Rising Nonferrous Metals is 1.46 times less risky than Shandong Homey. It trades about 0.06 of its potential returns per unit of risk. Shandong Homey Aquatic is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 150.00 in Shandong Homey Aquatic on November 2, 2024 and sell it today you would earn a total of 66.00 from holding Shandong Homey Aquatic or generate 44.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rising Nonferrous Metals vs. Shandong Homey Aquatic
Performance |
| Timeline |
| Rising Nonferrous Metals |
| Shandong Homey Aquatic |
Rising Nonferrous and Shandong Homey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rising Nonferrous and Shandong Homey
The main advantage of trading using opposite Rising Nonferrous and Shandong Homey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rising Nonferrous position performs unexpectedly, Shandong Homey 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 Homey will offset losses from the drop in Shandong Homey's long position.| Rising Nonferrous vs. Zijin Mining Group | Rising Nonferrous vs. Wanhua Chemical Group | Rising Nonferrous vs. Baoshan Iron Steel | Rising Nonferrous vs. Shandong Gold Mining |
| Shandong Homey vs. Allied Machinery Co | Shandong Homey vs. Shanghai Jinfeng Wine | Shandong Homey vs. Jinling Hotel Corp | Shandong Homey vs. Xiamen Jihong Package |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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