Correlation Between Shandong Huifa and Nantong Jiangshan
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By analyzing existing cross correlation between Shandong Huifa Foodstuff and Nantong Jiangshan Agrochemical, you can compare the effects of market volatilities on Shandong Huifa and Nantong Jiangshan 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 Huifa with a short position of Nantong Jiangshan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Huifa and Nantong Jiangshan.
Diversification Opportunities for Shandong Huifa and Nantong Jiangshan
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Nantong is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Huifa Foodstuff and Nantong Jiangshan Agrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nantong Jiangshan and Shandong Huifa 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 Huifa Foodstuff are associated (or correlated) with Nantong Jiangshan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nantong Jiangshan has no effect on the direction of Shandong Huifa i.e., Shandong Huifa and Nantong Jiangshan go up and down completely randomly.
Pair Corralation between Shandong Huifa and Nantong Jiangshan
Assuming the 90 days trading horizon Shandong Huifa Foodstuff is expected to generate 1.61 times more return on investment than Nantong Jiangshan. However, Shandong Huifa is 1.61 times more volatile than Nantong Jiangshan Agrochemical. It trades about 0.06 of its potential returns per unit of risk. Nantong Jiangshan Agrochemical is currently generating about -0.02 per unit of risk. If you would invest 776.00 in Shandong Huifa Foodstuff on September 4, 2024 and sell it today you would earn a total of 395.00 from holding Shandong Huifa Foodstuff or generate 50.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Huifa Foodstuff vs. Nantong Jiangshan Agrochemical
Performance |
| Timeline |
| Shandong Huifa Foodstuff |
| Nantong Jiangshan |
Shandong Huifa and Nantong Jiangshan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Huifa and Nantong Jiangshan
The main advantage of trading using opposite Shandong Huifa and Nantong Jiangshan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Huifa position performs unexpectedly, Nantong Jiangshan 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 Nantong Jiangshan will offset losses from the drop in Nantong Jiangshan's long position.| Shandong Huifa vs. Poly Real Estate | Shandong Huifa vs. China Vanke Co | Shandong Huifa vs. China Merchants Shekou | Shandong Huifa vs. Huafa Industrial Co |
| Nantong Jiangshan vs. Zijin Mining Group | Nantong Jiangshan vs. Wanhua Chemical Group | Nantong Jiangshan vs. Baoshan Iron Steel | Nantong Jiangshan vs. Rongsheng Petrochemical 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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