Correlation Between Shandong Sinoglory and Zhejiang Construction
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By analyzing existing cross correlation between Shandong Sinoglory Health and Zhejiang Construction Investment, you can compare the effects of market volatilities on Shandong Sinoglory and Zhejiang Construction 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 Zhejiang Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Sinoglory and Zhejiang Construction.
Diversification Opportunities for Shandong Sinoglory and Zhejiang Construction
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Zhejiang is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Sinoglory Health and Zhejiang Construction Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Construction 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 Zhejiang Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Construction has no effect on the direction of Shandong Sinoglory i.e., Shandong Sinoglory and Zhejiang Construction go up and down completely randomly.
Pair Corralation between Shandong Sinoglory and Zhejiang Construction
Assuming the 90 days trading horizon Shandong Sinoglory is expected to generate 7.36 times less return on investment than Zhejiang Construction. But when comparing it to its historical volatility, Shandong Sinoglory Health is 3.29 times less risky than Zhejiang Construction. It trades about 0.06 of its potential returns per unit of risk. Zhejiang Construction Investment is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 948.00 in Zhejiang Construction Investment on September 12, 2024 and sell it today you would earn a total of 115.00 from holding Zhejiang Construction Investment or generate 12.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shandong Sinoglory Health vs. Zhejiang Construction Investme
Performance |
| Timeline |
| Shandong Sinoglory Health |
| Zhejiang Construction |
Shandong Sinoglory and Zhejiang Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Sinoglory and Zhejiang Construction
The main advantage of trading using opposite Shandong Sinoglory and Zhejiang Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Sinoglory position performs unexpectedly, Zhejiang Construction 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 Zhejiang Construction will offset losses from the drop in Zhejiang Construction's long position.| Shandong Sinoglory vs. China Petroleum Chemical | Shandong Sinoglory vs. PetroChina Co Ltd | Shandong Sinoglory vs. China State Construction | Shandong Sinoglory vs. China Railway Group |
| Zhejiang Construction vs. Lutian Machinery Co | Zhejiang Construction vs. PetroChina Co Ltd | Zhejiang Construction vs. Bank of China | Zhejiang Construction vs. Gansu Jiu Steel |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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