Correlation Between Shandong Homey and Chengdu Xingrong
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By analyzing existing cross correlation between Shandong Homey Aquatic and Chengdu Xingrong Investment, you can compare the effects of market volatilities on Shandong Homey and Chengdu Xingrong 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 Shandong Homey with a short position of Chengdu Xingrong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Homey and Chengdu Xingrong.
Diversification Opportunities for Shandong Homey and Chengdu Xingrong
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shandong and Chengdu is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Homey Aquatic and Chengdu Xingrong Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Xingrong Inv and Shandong Homey 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 Shandong Homey Aquatic are associated (or correlated) with Chengdu Xingrong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Xingrong Inv has no effect on the direction of Shandong Homey i.e., Shandong Homey and Chengdu Xingrong go up and down completely randomly.
Pair Corralation between Shandong Homey and Chengdu Xingrong
Assuming the 90 days trading horizon Shandong Homey Aquatic is expected to generate 1.52 times more return on investment than Chengdu Xingrong. However, Shandong Homey is 1.52 times more volatile than Chengdu Xingrong Investment. It trades about 0.08 of its potential returns per unit of risk. Chengdu Xingrong Investment is currently generating about 0.01 per unit of risk. If you would invest 181.00 in Shandong Homey Aquatic on August 30, 2024 and sell it today you would earn a total of 62.00 from holding Shandong Homey Aquatic or generate 34.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Homey Aquatic vs. Chengdu Xingrong Investment
Performance |
| Timeline |
| Shandong Homey Aquatic |
| Chengdu Xingrong Inv |
Shandong Homey and Chengdu Xingrong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Homey and Chengdu Xingrong
The main advantage of trading using opposite Shandong Homey and Chengdu Xingrong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Homey position performs unexpectedly, Chengdu Xingrong 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 Chengdu Xingrong will offset losses from the drop in Chengdu Xingrong's long position.| Shandong Homey vs. Industrial and Commercial | Shandong Homey vs. China Construction Bank | Shandong Homey vs. Agricultural Bank of | Shandong Homey vs. Bank of China |
| Chengdu Xingrong vs. Shenzhen MYS Environmental | Chengdu Xingrong vs. AVIC Fund Management | Chengdu Xingrong vs. Shenzhen Bingchuan Network | Chengdu Xingrong vs. Penghua Shenzhen Energy |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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