Correlation Between Allied Machinery and Shaanxi Meineng
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By analyzing existing cross correlation between Allied Machinery Co and Shaanxi Meineng Clean, you can compare the effects of market volatilities on Allied Machinery and Shaanxi Meineng 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 Allied Machinery with a short position of Shaanxi Meineng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Machinery and Shaanxi Meineng.
Diversification Opportunities for Allied Machinery and Shaanxi Meineng
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Allied and Shaanxi is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Allied Machinery Co and Shaanxi Meineng Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Meineng Clean and Allied 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 Allied Machinery Co are associated (or correlated) with Shaanxi Meineng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Meineng Clean has no effect on the direction of Allied Machinery i.e., Allied Machinery and Shaanxi Meineng go up and down completely randomly.
Pair Corralation between Allied Machinery and Shaanxi Meineng
Assuming the 90 days trading horizon Allied Machinery Co is expected to generate 0.96 times more return on investment than Shaanxi Meineng. However, Allied Machinery Co is 1.05 times less risky than Shaanxi Meineng. It trades about 0.04 of its potential returns per unit of risk. Shaanxi Meineng Clean is currently generating about -0.07 per unit of risk. If you would invest 1,692 in Allied Machinery Co on September 13, 2024 and sell it today you would earn a total of 27.00 from holding Allied Machinery Co or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allied Machinery Co vs. Shaanxi Meineng Clean
Performance |
| Timeline |
| Allied Machinery |
| Shaanxi Meineng Clean |
Allied Machinery and Shaanxi Meineng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Machinery and Shaanxi Meineng
The main advantage of trading using opposite Allied Machinery and Shaanxi Meineng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Machinery position performs unexpectedly, Shaanxi Meineng 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 Shaanxi Meineng will offset losses from the drop in Shaanxi Meineng's long position.| Allied Machinery vs. Industrial and Commercial | Allied Machinery vs. Kweichow Moutai Co | Allied Machinery vs. Agricultural Bank of | Allied Machinery vs. China Mobile Limited |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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