Correlation Between China Satellite and Shandong Iron
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By analyzing existing cross correlation between China Satellite Communications and Shandong Iron and, you can compare the effects of market volatilities on China Satellite and Shandong Iron 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 Satellite with a short position of Shandong Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Satellite and Shandong Iron.
Diversification Opportunities for China Satellite and Shandong Iron
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Shandong is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding China Satellite Communications and Shandong Iron and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Iron and China Satellite 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 Satellite Communications are associated (or correlated) with Shandong Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Iron has no effect on the direction of China Satellite i.e., China Satellite and Shandong Iron go up and down completely randomly.
Pair Corralation between China Satellite and Shandong Iron
Assuming the 90 days trading horizon China Satellite Communications is expected to generate 1.18 times more return on investment than Shandong Iron. However, China Satellite is 1.18 times more volatile than Shandong Iron and. It trades about -0.2 of its potential returns per unit of risk. Shandong Iron and is currently generating about -0.28 per unit of risk. If you would invest 2,160 in China Satellite Communications on October 18, 2024 and sell it today you would lose (210.00) from holding China Satellite Communications or give up 9.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Satellite Communications vs. Shandong Iron and
Performance |
| Timeline |
| China Satellite Comm |
| Shandong Iron |
China Satellite and Shandong Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Satellite and Shandong Iron
The main advantage of trading using opposite China Satellite and Shandong Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Satellite position performs unexpectedly, Shandong Iron 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 Iron will offset losses from the drop in Shandong Iron's long position.| China Satellite vs. Shenzhen Noposion Agrochemicals | China Satellite vs. Sichuan Yahua Industrial | China Satellite vs. Jinhui Liquor Co | China Satellite vs. Vats Liquor Chain |
| Shandong Iron vs. Caihong Display Devices | Shandong Iron vs. Shenzhen Kexin Communication | Shandong Iron vs. China Satellite Communications | Shandong Iron vs. Guangzhou Seagull Kitchen |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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