Correlation Between Cultural Investment and Shandong Sanyuan
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By analyzing existing cross correlation between Cultural Investment Holdings and Shandong Sanyuan Biotechnology, you can compare the effects of market volatilities on Cultural Investment and Shandong Sanyuan 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 Cultural Investment with a short position of Shandong Sanyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cultural Investment and Shandong Sanyuan.
Diversification Opportunities for Cultural Investment and Shandong Sanyuan
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cultural and Shandong is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Cultural Investment Holdings and Shandong Sanyuan Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Sanyuan Bio and Cultural Investment 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 Cultural Investment Holdings are associated (or correlated) with Shandong Sanyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Sanyuan Bio has no effect on the direction of Cultural Investment i.e., Cultural Investment and Shandong Sanyuan go up and down completely randomly.
Pair Corralation between Cultural Investment and Shandong Sanyuan
Assuming the 90 days trading horizon Cultural Investment Holdings is expected to generate 2.02 times more return on investment than Shandong Sanyuan. However, Cultural Investment is 2.02 times more volatile than Shandong Sanyuan Biotechnology. It trades about 0.1 of its potential returns per unit of risk. Shandong Sanyuan Biotechnology is currently generating about 0.02 per unit of risk. If you would invest 206.00 in Cultural Investment Holdings on September 1, 2024 and sell it today you would earn a total of 14.00 from holding Cultural Investment Holdings or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cultural Investment Holdings vs. Shandong Sanyuan Biotechnology
Performance |
| Timeline |
| Cultural Investment |
| Shandong Sanyuan Bio |
Cultural Investment and Shandong Sanyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cultural Investment and Shandong Sanyuan
The main advantage of trading using opposite Cultural Investment and Shandong Sanyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cultural Investment position performs unexpectedly, Shandong Sanyuan 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 Sanyuan will offset losses from the drop in Shandong Sanyuan's long position.The idea behind Cultural Investment Holdings and Shandong Sanyuan Biotechnology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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