Correlation Between Shanghai Rongtai and Lecron Energy
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By analyzing existing cross correlation between Shanghai Rongtai Health and Lecron Energy Saving, you can compare the effects of market volatilities on Shanghai Rongtai and Lecron Energy 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 Shanghai Rongtai with a short position of Lecron Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Rongtai and Lecron Energy.
Diversification Opportunities for Shanghai Rongtai and Lecron Energy
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Lecron is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Rongtai Health and Lecron Energy Saving in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lecron Energy Saving and Shanghai Rongtai 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 Shanghai Rongtai Health are associated (or correlated) with Lecron Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lecron Energy Saving has no effect on the direction of Shanghai Rongtai i.e., Shanghai Rongtai and Lecron Energy go up and down completely randomly.
Pair Corralation between Shanghai Rongtai and Lecron Energy
Assuming the 90 days trading horizon Shanghai Rongtai Health is expected to generate 0.77 times more return on investment than Lecron Energy. However, Shanghai Rongtai Health is 1.3 times less risky than Lecron Energy. It trades about -0.43 of its potential returns per unit of risk. Lecron Energy Saving is currently generating about -0.43 per unit of risk. If you would invest 1,616 in Shanghai Rongtai Health on October 15, 2024 and sell it today you would lose (283.00) from holding Shanghai Rongtai Health or give up 17.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Rongtai Health vs. Lecron Energy Saving
Performance |
| Timeline |
| Shanghai Rongtai Health |
| Lecron Energy Saving |
Shanghai Rongtai and Lecron Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Rongtai and Lecron Energy
The main advantage of trading using opposite Shanghai Rongtai and Lecron Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Rongtai position performs unexpectedly, Lecron Energy 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 Lecron Energy will offset losses from the drop in Lecron Energy's long position.| Shanghai Rongtai vs. Hubei Geoway Investment | Shanghai Rongtai vs. Henan Shuanghui Investment | Shanghai Rongtai vs. Zhongrun Resources Investment | Shanghai Rongtai vs. Puya Semiconductor Shanghai |
| Lecron Energy vs. Songz Automobile Air | Lecron Energy vs. Beijing Kingsoft Office | Lecron Energy vs. Sinomach Automobile Co | Lecron Energy vs. Haima Automobile 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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