Correlation Between Shandong Homey and Chongqing Shunbo
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By analyzing existing cross correlation between Shandong Homey Aquatic and Chongqing Shunbo Aluminum, you can compare the effects of market volatilities on Shandong Homey and Chongqing Shunbo 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 Chongqing Shunbo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Homey and Chongqing Shunbo.
Diversification Opportunities for Shandong Homey and Chongqing Shunbo
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Chongqing is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Homey Aquatic and Chongqing Shunbo Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Shunbo Aluminum 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 Chongqing Shunbo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Shunbo Aluminum has no effect on the direction of Shandong Homey i.e., Shandong Homey and Chongqing Shunbo go up and down completely randomly.
Pair Corralation between Shandong Homey and Chongqing Shunbo
Assuming the 90 days trading horizon Shandong Homey Aquatic is expected to generate 1.93 times more return on investment than Chongqing Shunbo. However, Shandong Homey is 1.93 times more volatile than Chongqing Shunbo Aluminum. It trades about 0.08 of its potential returns per unit of risk. Chongqing Shunbo Aluminum is currently generating about 0.04 per unit of risk. If you would invest 184.00 in Shandong Homey Aquatic on October 14, 2024 and sell it today you would earn a total of 34.00 from holding Shandong Homey Aquatic or generate 18.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Homey Aquatic vs. Chongqing Shunbo Aluminum
Performance |
| Timeline |
| Shandong Homey Aquatic |
| Chongqing Shunbo Aluminum |
Shandong Homey and Chongqing Shunbo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Homey and Chongqing Shunbo
The main advantage of trading using opposite Shandong Homey and Chongqing Shunbo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Homey position performs unexpectedly, Chongqing Shunbo 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 Chongqing Shunbo will offset losses from the drop in Chongqing Shunbo's long position.| Shandong Homey vs. Guangdong Wens Foodstuff | Shandong Homey vs. Guilin Seamild Foods | Shandong Homey vs. Olympic Circuit Technology | Shandong Homey vs. Linewell Software Co |
| Chongqing Shunbo vs. Shandong Homey Aquatic | Chongqing Shunbo vs. Vohringer Home Technology | Chongqing Shunbo vs. UE Furniture Co | Chongqing Shunbo vs. Luolai Home Textile |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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