Correlation Between UE Furniture and Shandong Xinhua
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By analyzing existing cross correlation between UE Furniture Co and Shandong Xinhua Pharmaceutical, you can compare the effects of market volatilities on UE Furniture and Shandong Xinhua 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 UE Furniture with a short position of Shandong Xinhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of UE Furniture and Shandong Xinhua.
Diversification Opportunities for UE Furniture and Shandong Xinhua
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 603600 and Shandong is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding UE Furniture Co and Shandong Xinhua Pharmaceutical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Xinhua Phar and UE Furniture 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 UE Furniture Co are associated (or correlated) with Shandong Xinhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Xinhua Phar has no effect on the direction of UE Furniture i.e., UE Furniture and Shandong Xinhua go up and down completely randomly.
Pair Corralation between UE Furniture and Shandong Xinhua
Assuming the 90 days trading horizon UE Furniture Co is expected to under-perform the Shandong Xinhua. But the stock apears to be less risky and, when comparing its historical volatility, UE Furniture Co is 1.1 times less risky than Shandong Xinhua. The stock trades about -0.08 of its potential returns per unit of risk. The Shandong Xinhua Pharmaceutical is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,602 in Shandong Xinhua Pharmaceutical on September 4, 2024 and sell it today you would earn a total of 21.00 from holding Shandong Xinhua Pharmaceutical or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UE Furniture Co vs. Shandong Xinhua Pharmaceutical
Performance |
| Timeline |
| UE Furniture |
| Shandong Xinhua Phar |
UE Furniture and Shandong Xinhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UE Furniture and Shandong Xinhua
The main advantage of trading using opposite UE Furniture and Shandong Xinhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UE Furniture position performs unexpectedly, Shandong Xinhua 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 Xinhua will offset losses from the drop in Shandong Xinhua's long position.| UE Furniture vs. Nanjing Putian Telecommunications | UE Furniture vs. Kangyue Technology Co | UE Furniture vs. Shenzhen Hifuture Electric | UE Furniture vs. Tianjin Realty Development |
| Shandong Xinhua vs. Xilinmen Furniture Co | Shandong Xinhua vs. Shanghai Ziyan Foods | Shandong Xinhua vs. UE Furniture Co | Shandong Xinhua vs. Fujian Anjoy Foods |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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