Correlation Between China State and Shengyuan Environmental
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By analyzing existing cross correlation between China State Construction and Shengyuan Environmental Protection, you can compare the effects of market volatilities on China State and Shengyuan Environmental 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 China State with a short position of Shengyuan Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Shengyuan Environmental.
Diversification Opportunities for China State and Shengyuan Environmental
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Shengyuan is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Shengyuan Environmental Protec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shengyuan Environmental and China State 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 China State Construction are associated (or correlated) with Shengyuan Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shengyuan Environmental has no effect on the direction of China State i.e., China State and Shengyuan Environmental go up and down completely randomly.
Pair Corralation between China State and Shengyuan Environmental
Assuming the 90 days trading horizon China State Construction is expected to under-perform the Shengyuan Environmental. In addition to that, China State is 1.0 times more volatile than Shengyuan Environmental Protection. It trades about -0.01 of its total potential returns per unit of risk. Shengyuan Environmental Protection is currently generating about 0.01 per unit of volatility. If you would invest 1,390 in Shengyuan Environmental Protection on August 30, 2024 and sell it today you would lose (14.00) from holding Shengyuan Environmental Protection or give up 1.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. Shengyuan Environmental Protec
Performance |
| Timeline |
| China State Construction |
| Shengyuan Environmental |
China State and Shengyuan Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Shengyuan Environmental
The main advantage of trading using opposite China State and Shengyuan Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Shengyuan Environmental 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 Shengyuan Environmental will offset losses from the drop in Shengyuan Environmental's long position.| China State vs. Hangzhou Gaoxin Rubber | China State vs. Orinko Advanced Plastics | China State vs. De Rucci Healthy | China State vs. Everjoy Health Group |
| Shengyuan Environmental vs. Agricultural Bank of | Shengyuan Environmental vs. Industrial and Commercial | Shengyuan Environmental vs. Bank of China | Shengyuan Environmental vs. China Construction Bank |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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