Correlation Between Shaanxi Construction and Tongling Nonferrous
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By analyzing existing cross correlation between Shaanxi Construction Machinery and Tongling Nonferrous Metals, you can compare the effects of market volatilities on Shaanxi Construction and Tongling Nonferrous 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 Shaanxi Construction with a short position of Tongling Nonferrous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Construction and Tongling Nonferrous.
Diversification Opportunities for Shaanxi Construction and Tongling Nonferrous
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shaanxi and Tongling is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Construction Machinery and Tongling Nonferrous Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongling Nonferrous and Shaanxi Construction 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 Shaanxi Construction Machinery are associated (or correlated) with Tongling Nonferrous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongling Nonferrous has no effect on the direction of Shaanxi Construction i.e., Shaanxi Construction and Tongling Nonferrous go up and down completely randomly.
Pair Corralation between Shaanxi Construction and Tongling Nonferrous
Assuming the 90 days trading horizon Shaanxi Construction Machinery is expected to under-perform the Tongling Nonferrous. In addition to that, Shaanxi Construction is 2.47 times more volatile than Tongling Nonferrous Metals. It trades about -0.45 of its total potential returns per unit of risk. Tongling Nonferrous Metals is currently generating about -0.39 per unit of volatility. If you would invest 358.00 in Tongling Nonferrous Metals on October 13, 2024 and sell it today you would lose (36.00) from holding Tongling Nonferrous Metals or give up 10.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Construction Machinery vs. Tongling Nonferrous Metals
Performance |
| Timeline |
| Shaanxi Construction |
| Tongling Nonferrous |
Shaanxi Construction and Tongling Nonferrous Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Construction and Tongling Nonferrous
The main advantage of trading using opposite Shaanxi Construction and Tongling Nonferrous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Construction position performs unexpectedly, Tongling Nonferrous 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 Tongling Nonferrous will offset losses from the drop in Tongling Nonferrous' long position.| Shaanxi Construction vs. Industrial and Commercial | Shaanxi Construction vs. Agricultural Bank of | Shaanxi Construction vs. China Construction Bank | Shaanxi Construction vs. Bank of China |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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