Correlation Between Qijing Machinery and Shanghai Rongtai
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By analyzing existing cross correlation between Qijing Machinery and Shanghai Rongtai Health, you can compare the effects of market volatilities on Qijing Machinery and Shanghai Rongtai 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 Qijing Machinery with a short position of Shanghai Rongtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qijing Machinery and Shanghai Rongtai.
Diversification Opportunities for Qijing Machinery and Shanghai Rongtai
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Qijing and Shanghai is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Qijing Machinery and Shanghai Rongtai Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Rongtai Health and Qijing Machinery 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 Qijing Machinery are associated (or correlated) with Shanghai Rongtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Rongtai Health has no effect on the direction of Qijing Machinery i.e., Qijing Machinery and Shanghai Rongtai go up and down completely randomly.
Pair Corralation between Qijing Machinery and Shanghai Rongtai
Assuming the 90 days trading horizon Qijing Machinery is expected to generate 2.91 times less return on investment than Shanghai Rongtai. In addition to that, Qijing Machinery is 1.34 times more volatile than Shanghai Rongtai Health. It trades about 0.03 of its total potential returns per unit of risk. Shanghai Rongtai Health is currently generating about 0.11 per unit of volatility. If you would invest 1,453 in Shanghai Rongtai Health on September 12, 2024 and sell it today you would earn a total of 62.00 from holding Shanghai Rongtai Health or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qijing Machinery vs. Shanghai Rongtai Health
Performance |
| Timeline |
| Qijing Machinery |
| Shanghai Rongtai Health |
Qijing Machinery and Shanghai Rongtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qijing Machinery and Shanghai Rongtai
The main advantage of trading using opposite Qijing Machinery and Shanghai Rongtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qijing Machinery position performs unexpectedly, Shanghai Rongtai 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 Shanghai Rongtai will offset losses from the drop in Shanghai Rongtai's long position.| Qijing Machinery vs. Gansu Jiu Steel | Qijing Machinery vs. Shandong Mining Machinery | Qijing Machinery vs. Aba Chemicals Corp | Qijing Machinery vs. BlueFocus Communication Group |
| Shanghai Rongtai vs. Lutian Machinery Co | Shanghai Rongtai vs. PetroChina Co Ltd | Shanghai Rongtai vs. Bank of China | Shanghai Rongtai vs. Gansu Jiu Steel |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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