Correlation Between Sichuan Teway and Shandong Homey
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By analyzing existing cross correlation between Sichuan Teway Food and Shandong Homey Aquatic, you can compare the effects of market volatilities on Sichuan Teway and Shandong Homey 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 Sichuan Teway with a short position of Shandong Homey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Teway and Shandong Homey.
Diversification Opportunities for Sichuan Teway and Shandong Homey
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sichuan and Shandong is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Teway Food and Shandong Homey Aquatic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Homey Aquatic and Sichuan Teway 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 Sichuan Teway Food are associated (or correlated) with Shandong Homey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Homey Aquatic has no effect on the direction of Sichuan Teway i.e., Sichuan Teway and Shandong Homey go up and down completely randomly.
Pair Corralation between Sichuan Teway and Shandong Homey
Assuming the 90 days trading horizon Sichuan Teway Food is expected to under-perform the Shandong Homey. But the stock apears to be less risky and, when comparing its historical volatility, Sichuan Teway Food is 1.68 times less risky than Shandong Homey. The stock trades about -0.37 of its potential returns per unit of risk. The Shandong Homey Aquatic is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 216.00 in Shandong Homey Aquatic on November 27, 2024 and sell it today you would earn a total of 11.00 from holding Shandong Homey Aquatic or generate 5.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Teway Food vs. Shandong Homey Aquatic
Performance |
| Timeline |
| Sichuan Teway Food |
| Shandong Homey Aquatic |
Sichuan Teway and Shandong Homey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Teway and Shandong Homey
The main advantage of trading using opposite Sichuan Teway and Shandong Homey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Teway position performs unexpectedly, Shandong Homey 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 Homey will offset losses from the drop in Shandong Homey's long position.| Sichuan Teway vs. Kweichow Moutai Co | Sichuan Teway vs. Wuliangye Yibin Co | Sichuan Teway vs. Shenzhen Mindray Bio Medical | Sichuan Teway vs. G bits Network Technology |
| Shandong Homey vs. Nancal Energy Saving Tech | Shandong Homey vs. Dhc Software Co | Shandong Homey vs. China Everbright Bank | Shandong Homey vs. Farsoon Technology Co |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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