Correlation Between Shandong Sinoglory and China Vanke
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By analyzing existing cross correlation between Shandong Sinoglory Health and China Vanke Co, you can compare the effects of market volatilities on Shandong Sinoglory and China Vanke 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 Shandong Sinoglory with a short position of China Vanke. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Sinoglory and China Vanke.
Diversification Opportunities for Shandong Sinoglory and China Vanke
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shandong and China is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Sinoglory Health and China Vanke Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Vanke and Shandong Sinoglory 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 Shandong Sinoglory Health are associated (or correlated) with China Vanke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Vanke has no effect on the direction of Shandong Sinoglory i.e., Shandong Sinoglory and China Vanke go up and down completely randomly.
Pair Corralation between Shandong Sinoglory and China Vanke
Assuming the 90 days trading horizon Shandong Sinoglory Health is expected to generate 0.64 times more return on investment than China Vanke. However, Shandong Sinoglory Health is 1.57 times less risky than China Vanke. It trades about 0.05 of its potential returns per unit of risk. China Vanke Co is currently generating about -0.01 per unit of risk. If you would invest 1,168 in Shandong Sinoglory Health on October 27, 2024 and sell it today you would earn a total of 20.00 from holding Shandong Sinoglory Health or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Sinoglory Health vs. China Vanke Co
Performance |
| Timeline |
| Shandong Sinoglory Health |
| China Vanke |
Shandong Sinoglory and China Vanke Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Sinoglory and China Vanke
The main advantage of trading using opposite Shandong Sinoglory and China Vanke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Sinoglory position performs unexpectedly, China Vanke 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 China Vanke will offset losses from the drop in China Vanke's long position.The idea behind Shandong Sinoglory Health and China Vanke Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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