Correlation Between Shandong Huifa and China Zheshang
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By analyzing existing cross correlation between Shandong Huifa Foodstuff and China Zheshang Bank, you can compare the effects of market volatilities on Shandong Huifa and China Zheshang 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 China Zheshang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Huifa and China Zheshang.
Diversification Opportunities for Shandong Huifa and China Zheshang
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and China is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Huifa Foodstuff and China Zheshang Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Zheshang Bank 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 China Zheshang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Zheshang Bank has no effect on the direction of Shandong Huifa i.e., Shandong Huifa and China Zheshang go up and down completely randomly.
Pair Corralation between Shandong Huifa and China Zheshang
Assuming the 90 days trading horizon Shandong Huifa Foodstuff is expected to generate 3.09 times more return on investment than China Zheshang. However, Shandong Huifa is 3.09 times more volatile than China Zheshang Bank. It trades about 0.06 of its potential returns per unit of risk. China Zheshang Bank is currently generating about 0.02 per unit of risk. If you would invest 797.00 in Shandong Huifa Foodstuff on September 14, 2024 and sell it today you would earn a total of 964.00 from holding Shandong Huifa Foodstuff or generate 120.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Huifa Foodstuff vs. China Zheshang Bank
Performance |
| Timeline |
| Shandong Huifa Foodstuff |
| China Zheshang Bank |
Shandong Huifa and China Zheshang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Huifa and China Zheshang
The main advantage of trading using opposite Shandong Huifa and China Zheshang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Huifa position performs unexpectedly, China Zheshang 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 Zheshang will offset losses from the drop in China Zheshang's long position.| Shandong Huifa vs. Nanjing Putian Telecommunications | Shandong Huifa vs. Tianjin Realty Development | Shandong Huifa vs. Kangyue Technology Co | Shandong Huifa vs. Shenzhen Hifuture Electric |
| China Zheshang vs. Heilongjiang Transport Development | China Zheshang vs. Sino Platinum Metals Co | China Zheshang vs. Shandong Huifa Foodstuff | China Zheshang vs. Tianshan Aluminum Group |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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