Correlation Between Senci Electric and Shandong Rike
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By analyzing existing cross correlation between Senci Electric Machinery and Shandong Rike Chemical, you can compare the effects of market volatilities on Senci Electric and Shandong Rike 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 Senci Electric with a short position of Shandong Rike. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senci Electric and Shandong Rike.
Diversification Opportunities for Senci Electric and Shandong Rike
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Senci and Shandong is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Senci Electric Machinery and Shandong Rike Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Rike Chemical and Senci Electric 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 Senci Electric Machinery are associated (or correlated) with Shandong Rike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Rike Chemical has no effect on the direction of Senci Electric i.e., Senci Electric and Shandong Rike go up and down completely randomly.
Pair Corralation between Senci Electric and Shandong Rike
Assuming the 90 days trading horizon Senci Electric Machinery is expected to generate 0.65 times more return on investment than Shandong Rike. However, Senci Electric Machinery is 1.53 times less risky than Shandong Rike. It trades about 0.02 of its potential returns per unit of risk. Shandong Rike Chemical is currently generating about -0.04 per unit of risk. If you would invest 1,772 in Senci Electric Machinery on October 29, 2024 and sell it today you would earn a total of 9.00 from holding Senci Electric Machinery or generate 0.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Senci Electric Machinery vs. Shandong Rike Chemical
Performance |
Timeline |
Senci Electric Machinery |
Shandong Rike Chemical |
Senci Electric and Shandong Rike Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Senci Electric and Shandong Rike
The main advantage of trading using opposite Senci Electric and Shandong Rike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senci Electric position performs unexpectedly, Shandong Rike 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 Rike will offset losses from the drop in Shandong Rike's long position.Senci Electric vs. Industrial and Commercial | Senci Electric vs. Agricultural Bank of | Senci Electric vs. China Construction Bank | Senci Electric vs. Bank of China |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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