Correlation Between Suzhou Weizhixiang and Super-Dragon Engineering
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By analyzing existing cross correlation between Suzhou Weizhixiang Food and Super Dragon Engineering Plastics, you can compare the effects of market volatilities on Suzhou Weizhixiang and Super-Dragon Engineering 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 Suzhou Weizhixiang with a short position of Super-Dragon Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suzhou Weizhixiang and Super-Dragon Engineering.
Diversification Opportunities for Suzhou Weizhixiang and Super-Dragon Engineering
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Suzhou and Super-Dragon is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Suzhou Weizhixiang Food and Super Dragon Engineering Plast in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super-Dragon Engineering and Suzhou Weizhixiang 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 Suzhou Weizhixiang Food are associated (or correlated) with Super-Dragon Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super-Dragon Engineering has no effect on the direction of Suzhou Weizhixiang i.e., Suzhou Weizhixiang and Super-Dragon Engineering go up and down completely randomly.
Pair Corralation between Suzhou Weizhixiang and Super-Dragon Engineering
Assuming the 90 days trading horizon Suzhou Weizhixiang Food is expected to under-perform the Super-Dragon Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Suzhou Weizhixiang Food is 1.37 times less risky than Super-Dragon Engineering. The stock trades about -0.03 of its potential returns per unit of risk. The Super Dragon Engineering Plastics is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 4,288 in Super Dragon Engineering Plastics on September 2, 2024 and sell it today you would lose (393.00) from holding Super Dragon Engineering Plastics or give up 9.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suzhou Weizhixiang Food vs. Super Dragon Engineering Plast
Performance |
| Timeline |
| Suzhou Weizhixiang Food |
| Super-Dragon Engineering |
Suzhou Weizhixiang and Super-Dragon Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suzhou Weizhixiang and Super-Dragon Engineering
The main advantage of trading using opposite Suzhou Weizhixiang and Super-Dragon Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suzhou Weizhixiang position performs unexpectedly, Super-Dragon Engineering 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 Super-Dragon Engineering will offset losses from the drop in Super-Dragon Engineering's long position.The idea behind Suzhou Weizhixiang Food and Super Dragon Engineering Plastics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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