Correlation Between China State and Shandong Sanyuan
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By analyzing existing cross correlation between China State Construction and Shandong Sanyuan Biotechnology, you can compare the effects of market volatilities on China State and Shandong Sanyuan 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 Shandong Sanyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Shandong Sanyuan.
Diversification Opportunities for China State and Shandong Sanyuan
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Shandong is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Shandong Sanyuan Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Sanyuan Bio 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 Shandong Sanyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Sanyuan Bio has no effect on the direction of China State i.e., China State and Shandong Sanyuan go up and down completely randomly.
Pair Corralation between China State and Shandong Sanyuan
Assuming the 90 days trading horizon China State Construction is expected to generate 0.79 times more return on investment than Shandong Sanyuan. However, China State Construction is 1.26 times less risky than Shandong Sanyuan. It trades about 0.02 of its potential returns per unit of risk. Shandong Sanyuan Biotechnology is currently generating about 0.01 per unit of risk. If you would invest 582.00 in China State Construction on September 12, 2024 and sell it today you would earn a total of 30.00 from holding China State Construction or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. Shandong Sanyuan Biotechnology
Performance |
| Timeline |
| China State Construction |
| Shandong Sanyuan Bio |
China State and Shandong Sanyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Shandong Sanyuan
The main advantage of trading using opposite China State and Shandong Sanyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Shandong Sanyuan 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 Sanyuan will offset losses from the drop in Shandong Sanyuan's long position.| China State vs. Xilinmen Furniture Co | China State vs. Nanjing OLO Home | China State vs. Iat Automobile Technology | China State vs. Fiberhome Telecommunication Technologies |
| Shandong Sanyuan vs. China Petroleum Chemical | Shandong Sanyuan vs. PetroChina Co Ltd | Shandong Sanyuan vs. China State Construction | Shandong Sanyuan vs. China Railway Group |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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