Correlation Between Caihong Display and Shandong Iron
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By analyzing existing cross correlation between Caihong Display Devices and Shandong Iron and, you can compare the effects of market volatilities on Caihong Display and Shandong Iron 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 Caihong Display with a short position of Shandong Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Shandong Iron.
Diversification Opportunities for Caihong Display and Shandong Iron
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Caihong and Shandong is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Shandong Iron and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Iron and Caihong Display 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 Caihong Display Devices are associated (or correlated) with Shandong Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Iron has no effect on the direction of Caihong Display i.e., Caihong Display and Shandong Iron go up and down completely randomly.
Pair Corralation between Caihong Display and Shandong Iron
Assuming the 90 days trading horizon Caihong Display Devices is expected to generate 1.55 times more return on investment than Shandong Iron. However, Caihong Display is 1.55 times more volatile than Shandong Iron and. It trades about 0.03 of its potential returns per unit of risk. Shandong Iron and is currently generating about -0.28 per unit of risk. If you would invest 815.00 in Caihong Display Devices on October 18, 2024 and sell it today you would earn a total of 10.00 from holding Caihong Display Devices or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caihong Display Devices vs. Shandong Iron and
Performance |
| Timeline |
| Caihong Display Devices |
| Shandong Iron |
Caihong Display and Shandong Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caihong Display and Shandong Iron
The main advantage of trading using opposite Caihong Display and Shandong Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display position performs unexpectedly, Shandong Iron 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 Iron will offset losses from the drop in Shandong Iron's long position.| Caihong Display vs. Kangping Technology Co | Caihong Display vs. Gansu Huangtai Wine marketing | Caihong Display vs. Xinxiang Chemical Fiber | Caihong Display vs. Hengli Petrochemical Co |
| Shandong Iron vs. Caihong Display Devices | Shandong Iron vs. Shenzhen Kexin Communication | Shandong Iron vs. China Satellite Communications | Shandong Iron vs. Guangzhou Seagull Kitchen |
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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