Correlation Between Senci Electric and Shanxi Lanhua
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By analyzing existing cross correlation between Senci Electric Machinery and Shanxi Lanhua Sci Tech, you can compare the effects of market volatilities on Senci Electric and Shanxi Lanhua 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 Shanxi Lanhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senci Electric and Shanxi Lanhua.
Diversification Opportunities for Senci Electric and Shanxi Lanhua
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Senci and Shanxi is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Senci Electric Machinery and Shanxi Lanhua Sci Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanxi Lanhua Sci 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 Shanxi Lanhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanxi Lanhua Sci has no effect on the direction of Senci Electric i.e., Senci Electric and Shanxi Lanhua go up and down completely randomly.
Pair Corralation between Senci Electric and Shanxi Lanhua
Assuming the 90 days trading horizon Senci Electric Machinery is expected to generate 1.96 times more return on investment than Shanxi Lanhua. However, Senci Electric is 1.96 times more volatile than Shanxi Lanhua Sci Tech. It trades about 0.17 of its potential returns per unit of risk. Shanxi Lanhua Sci Tech is currently generating about -0.27 per unit of risk. If you would invest 1,651 in Senci Electric Machinery on November 6, 2024 and sell it today you would earn a total of 108.00 from holding Senci Electric Machinery or generate 6.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senci Electric Machinery vs. Shanxi Lanhua Sci Tech
Performance |
| Timeline |
| Senci Electric Machinery |
| Shanxi Lanhua Sci |
Senci Electric and Shanxi Lanhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senci Electric and Shanxi Lanhua
The main advantage of trading using opposite Senci Electric and Shanxi Lanhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senci Electric position performs unexpectedly, Shanxi Lanhua 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 Shanxi Lanhua will offset losses from the drop in Shanxi Lanhua's long position.| Senci Electric vs. Ningbo Fujia Industrial | Senci Electric vs. Gem Year Industrial Co | Senci Electric vs. Huasi Agricultural Development | Senci Electric vs. Hongrun Construction Group |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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