Correlation Between Shandong Homey and Sichuan Teway
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By analyzing existing cross correlation between Shandong Homey Aquatic and Sichuan Teway Food, you can compare the effects of market volatilities on Shandong Homey and Sichuan Teway 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 Sichuan Teway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Homey and Sichuan Teway.
Diversification Opportunities for Shandong Homey and Sichuan Teway
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Sichuan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Homey Aquatic and Sichuan Teway Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Teway Food 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 Sichuan Teway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Teway Food has no effect on the direction of Shandong Homey i.e., Shandong Homey and Sichuan Teway go up and down completely randomly.
Pair Corralation between Shandong Homey and Sichuan Teway
Assuming the 90 days trading horizon Shandong Homey Aquatic is expected to generate 1.19 times more return on investment than Sichuan Teway. However, Shandong Homey is 1.19 times more volatile than Sichuan Teway Food. It trades about 0.01 of its potential returns per unit of risk. Sichuan Teway Food is currently generating about -0.02 per unit of risk. If you would invest 247.00 in Shandong Homey Aquatic on November 27, 2024 and sell it today you would lose (20.00) from holding Shandong Homey Aquatic or give up 8.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Homey Aquatic vs. Sichuan Teway Food
Performance |
| Timeline |
| Shandong Homey Aquatic |
| Sichuan Teway Food |
Shandong Homey and Sichuan Teway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Homey and Sichuan Teway
The main advantage of trading using opposite Shandong Homey and Sichuan Teway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Homey position performs unexpectedly, Sichuan Teway 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 Sichuan Teway will offset losses from the drop in Sichuan Teway's long position.| Shandong Homey vs. Nancal Energy Saving Tech | Shandong Homey vs. Dhc Software Co | Shandong Homey vs. China Everbright Bank | Shandong Homey vs. Farsoon Technology Co |
| Sichuan Teway vs. Kweichow Moutai Co | Sichuan Teway vs. Wuliangye Yibin Co | Sichuan Teway vs. Shenzhen Mindray Bio Medical | Sichuan Teway vs. G bits Network Technology |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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