Correlation Between Shuang Bang and Chernan Metal
Can any of the company-specific risk be diversified away by investing in both Shuang Bang and Chernan Metal at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Shuang Bang and Chernan Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shuang Bang Industrial and Chernan Metal Industrial, you can compare the effects of market volatilities on Shuang Bang and Chernan Metal 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 Shuang Bang with a short position of Chernan Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuang Bang and Chernan Metal.
Diversification Opportunities for Shuang Bang and Chernan Metal
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shuang and Chernan is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Shuang Bang Industrial and Chernan Metal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chernan Metal Industrial and Shuang Bang 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 Shuang Bang Industrial are associated (or correlated) with Chernan Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chernan Metal Industrial has no effect on the direction of Shuang Bang i.e., Shuang Bang and Chernan Metal go up and down completely randomly.
Pair Corralation between Shuang Bang and Chernan Metal
Assuming the 90 days trading horizon Shuang Bang Industrial is not expected to generate positive returns. However, Shuang Bang Industrial is 1.73 times less risky than Chernan Metal. It waists most of its returns potential to compensate for thr risk taken. Chernan Metal is generating about 0.02 per unit of risk. If you would invest 3,845 in Chernan Metal Industrial on August 24, 2024 and sell it today you would earn a total of 280.00 from holding Chernan Metal Industrial or generate 7.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shuang Bang Industrial vs. Chernan Metal Industrial
Performance |
| Timeline |
| Shuang Bang Industrial |
| Chernan Metal Industrial |
Shuang Bang and Chernan Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shuang Bang and Chernan Metal
The main advantage of trading using opposite Shuang Bang and Chernan Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuang Bang position performs unexpectedly, Chernan Metal 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 Chernan Metal will offset losses from the drop in Chernan Metal's long position.| Shuang Bang vs. Delta Electronics | Shuang Bang vs. China Steel Chemical | Shuang Bang vs. Hota Industrial Mfg | Shuang Bang vs. Ruentex Development Co |
| Chernan Metal vs. Baotek Industrial Materials | Chernan Metal vs. Tex Ray Industrial Co | Chernan Metal vs. Unique Optical Industrial | Chernan Metal vs. Shuang Bang Industrial |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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