Correlation Between Shaanxi Construction and Allied Machinery
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By analyzing existing cross correlation between Shaanxi Construction Machinery and Allied Machinery Co, you can compare the effects of market volatilities on Shaanxi Construction and Allied Machinery 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 Allied Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Construction and Allied Machinery.
Diversification Opportunities for Shaanxi Construction and Allied Machinery
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shaanxi and Allied is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Construction Machinery and Allied Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Machinery 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 Allied Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Machinery has no effect on the direction of Shaanxi Construction i.e., Shaanxi Construction and Allied Machinery go up and down completely randomly.
Pair Corralation between Shaanxi Construction and Allied Machinery
Assuming the 90 days trading horizon Shaanxi Construction Machinery is expected to generate 1.39 times more return on investment than Allied Machinery. However, Shaanxi Construction is 1.39 times more volatile than Allied Machinery Co. It trades about 0.1 of its potential returns per unit of risk. Allied Machinery Co is currently generating about 0.02 per unit of risk. If you would invest 243.00 in Shaanxi Construction Machinery on September 27, 2024 and sell it today you would earn a total of 97.00 from holding Shaanxi Construction Machinery or generate 39.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Construction Machinery vs. Allied Machinery Co
Performance |
| Timeline |
| Shaanxi Construction |
| Allied Machinery |
Shaanxi Construction and Allied Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Construction and Allied Machinery
The main advantage of trading using opposite Shaanxi Construction and Allied Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Construction position performs unexpectedly, Allied Machinery 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 Allied Machinery will offset losses from the drop in Allied Machinery's long position.| Shaanxi Construction vs. Cambricon Technologies Corp | Shaanxi Construction vs. Loongson Technology Corp | Shaanxi Construction vs. Shenzhen Fortune Trend | Shaanxi Construction vs. Chongqing Road Bridge |
| Allied Machinery vs. HeBei Jinniu Chemical | Allied Machinery vs. Markor International Home | Allied Machinery vs. Guizhou Chanhen Chemical | Allied Machinery vs. Xilong Chemical Co |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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