Correlation Between Industrial and China Shenhua
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By analyzing existing cross correlation between Industrial and Commercial and China Shenhua Energy, you can compare the effects of market volatilities on Industrial and China Shenhua 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 Industrial with a short position of China Shenhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and China Shenhua.
Diversification Opportunities for Industrial and China Shenhua
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Industrial and China is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and China Shenhua Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Shenhua Energy and Industrial 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 Industrial and Commercial are associated (or correlated) with China Shenhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Shenhua Energy has no effect on the direction of Industrial i.e., Industrial and China Shenhua go up and down completely randomly.
Pair Corralation between Industrial and China Shenhua
Assuming the 90 days trading horizon Industrial and Commercial is expected to generate 0.82 times more return on investment than China Shenhua. However, Industrial and Commercial is 1.22 times less risky than China Shenhua. It trades about 0.09 of its potential returns per unit of risk. China Shenhua Energy is currently generating about 0.06 per unit of risk. If you would invest 425.00 in Industrial and Commercial on November 27, 2024 and sell it today you would earn a total of 264.00 from holding Industrial and Commercial or generate 62.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. China Shenhua Energy
Performance |
| Timeline |
| Industrial and Commercial |
| China Shenhua Energy |
Industrial and China Shenhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and China Shenhua
The main advantage of trading using opposite Industrial and China Shenhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, China Shenhua 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 China Shenhua will offset losses from the drop in China Shenhua's long position.| Industrial vs. Zhengzhou Coal Mining | Industrial vs. Tibet Huayu Mining | Industrial vs. Dhc Software Co | Industrial vs. Linewell Software Co |
| China Shenhua vs. Haima Automobile Group | China Shenhua vs. CIMC Vehicles Co | China Shenhua vs. Changchun Engley Automobile | China Shenhua vs. Zhejiang Qianjiang Motorcycle |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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