Correlation Between Dongxing Sec and Shanxi Lanhua
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By analyzing existing cross correlation between Dongxing Sec Co and Shanxi Lanhua Sci Tech, you can compare the effects of market volatilities on Dongxing Sec and Shanxi Lanhua 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 Dongxing Sec with a short position of Shanxi Lanhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongxing Sec and Shanxi Lanhua.
Diversification Opportunities for Dongxing Sec and Shanxi Lanhua
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongxing and Shanxi is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dongxing Sec Co and Shanxi Lanhua Sci Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanxi Lanhua Sci and Dongxing Sec 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 Dongxing Sec Co are associated (or correlated) with Shanxi Lanhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanxi Lanhua Sci has no effect on the direction of Dongxing Sec i.e., Dongxing Sec and Shanxi Lanhua go up and down completely randomly.
Pair Corralation between Dongxing Sec and Shanxi Lanhua
Assuming the 90 days trading horizon Dongxing Sec Co is expected to generate 1.01 times more return on investment than Shanxi Lanhua. However, Dongxing Sec is 1.01 times more volatile than Shanxi Lanhua Sci Tech. It trades about 0.05 of its potential returns per unit of risk. Shanxi Lanhua Sci Tech is currently generating about 0.0 per unit of risk. If you would invest 799.00 in Dongxing Sec Co on September 3, 2024 and sell it today you would earn a total of 339.00 from holding Dongxing Sec Co or generate 42.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongxing Sec Co vs. Shanxi Lanhua Sci Tech
Performance |
| Timeline |
| Dongxing Sec |
| Shanxi Lanhua Sci |
Dongxing Sec and Shanxi Lanhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongxing Sec and Shanxi Lanhua
The main advantage of trading using opposite Dongxing Sec and Shanxi Lanhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongxing Sec position performs unexpectedly, Shanxi Lanhua 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 Shanxi Lanhua will offset losses from the drop in Shanxi Lanhua's long position.| Dongxing Sec vs. Air China Ltd | Dongxing Sec vs. Spring Airlines Co | Dongxing Sec vs. MayAir Technology Co | Dongxing Sec vs. Kunwu Jiuding Investment |
| Shanxi Lanhua vs. Gansu Jiu Steel | Shanxi Lanhua vs. Ming Yang Smart | Shanxi Lanhua vs. Aba Chemicals Corp | Shanxi Lanhua vs. Loctek Ergonomic Technology |
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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