Correlation Between Heilongjiang Agriculture and Shaanxi Construction
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By analyzing existing cross correlation between Heilongjiang Agriculture Co and Shaanxi Construction Machinery, you can compare the effects of market volatilities on Heilongjiang Agriculture 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 Heilongjiang Agriculture with a short position of Shaanxi Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heilongjiang Agriculture and Shaanxi Construction.
Diversification Opportunities for Heilongjiang Agriculture and Shaanxi Construction
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Heilongjiang and Shaanxi is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Heilongjiang Agriculture 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 Heilongjiang Agriculture 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 Heilongjiang Agriculture 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 Heilongjiang Agriculture i.e., Heilongjiang Agriculture and Shaanxi Construction go up and down completely randomly.
Pair Corralation between Heilongjiang Agriculture and Shaanxi Construction
Assuming the 90 days trading horizon Heilongjiang Agriculture Co is expected to generate 0.45 times more return on investment than Shaanxi Construction. However, Heilongjiang Agriculture Co is 2.2 times less risky than Shaanxi Construction. It trades about -0.1 of its potential returns per unit of risk. Shaanxi Construction Machinery is currently generating about -0.12 per unit of risk. If you would invest 1,437 in Heilongjiang Agriculture Co on October 20, 2024 and sell it today you would lose (57.00) from holding Heilongjiang Agriculture Co or give up 3.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heilongjiang Agriculture Co vs. Shaanxi Construction Machinery
Performance |
| Timeline |
| Heilongjiang Agriculture |
| Shaanxi Construction |
Heilongjiang Agriculture and Shaanxi Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heilongjiang Agriculture and Shaanxi Construction
The main advantage of trading using opposite Heilongjiang Agriculture and Shaanxi Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heilongjiang Agriculture 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.| Heilongjiang Agriculture vs. V V Food | Heilongjiang Agriculture vs. HaiXin Foods Co | Heilongjiang Agriculture vs. Olympic Circuit Technology | Heilongjiang Agriculture vs. Namchow Food Group |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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