Correlation Between Shaanxi Beiyuan and Shandong Xinhua
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By analyzing existing cross correlation between Shaanxi Beiyuan Chemical and Shandong Xinhua Pharmaceutical, you can compare the effects of market volatilities on Shaanxi Beiyuan and Shandong Xinhua 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 Beiyuan with a short position of Shandong Xinhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Beiyuan and Shandong Xinhua.
Diversification Opportunities for Shaanxi Beiyuan and Shandong Xinhua
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shaanxi and Shandong is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Beiyuan Chemical and Shandong Xinhua Pharmaceutical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Xinhua Phar and Shaanxi Beiyuan 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 Beiyuan Chemical are associated (or correlated) with Shandong Xinhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Xinhua Phar has no effect on the direction of Shaanxi Beiyuan i.e., Shaanxi Beiyuan and Shandong Xinhua go up and down completely randomly.
Pair Corralation between Shaanxi Beiyuan and Shandong Xinhua
Assuming the 90 days trading horizon Shaanxi Beiyuan Chemical is expected to generate 0.57 times more return on investment than Shandong Xinhua. However, Shaanxi Beiyuan Chemical is 1.76 times less risky than Shandong Xinhua. It trades about 0.14 of its potential returns per unit of risk. Shandong Xinhua Pharmaceutical is currently generating about 0.04 per unit of risk. If you would invest 426.00 in Shaanxi Beiyuan Chemical on September 3, 2024 and sell it today you would earn a total of 15.00 from holding Shaanxi Beiyuan Chemical or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Beiyuan Chemical vs. Shandong Xinhua Pharmaceutical
Performance |
| Timeline |
| Shaanxi Beiyuan Chemical |
| Shandong Xinhua Phar |
Shaanxi Beiyuan and Shandong Xinhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Beiyuan and Shandong Xinhua
The main advantage of trading using opposite Shaanxi Beiyuan and Shandong Xinhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Beiyuan position performs unexpectedly, Shandong Xinhua 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 Xinhua will offset losses from the drop in Shandong Xinhua's long position.| Shaanxi Beiyuan vs. Zijin Mining Group | Shaanxi Beiyuan vs. Baoshan Iron Steel | Shaanxi Beiyuan vs. Rongsheng Petrochemical Co | Shaanxi Beiyuan vs. Hoshine Silicon Ind |
| Shandong Xinhua vs. Guangdong Shenglu Telecommunication | Shandong Xinhua vs. Wuxi Chemical Equipment | Shandong Xinhua vs. CICT Mobile Communication | Shandong Xinhua vs. Shaanxi Beiyuan Chemical |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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