Correlation Between Sinosteel Luonai and Shenzhen Shenbao
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By analyzing existing cross correlation between Sinosteel Luonai Materials and Shenzhen Shenbao Industrial, you can compare the effects of market volatilities on Sinosteel Luonai and Shenzhen Shenbao 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 Sinosteel Luonai with a short position of Shenzhen Shenbao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinosteel Luonai and Shenzhen Shenbao.
Diversification Opportunities for Sinosteel Luonai and Shenzhen Shenbao
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sinosteel and Shenzhen is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Sinosteel Luonai Materials and Shenzhen Shenbao Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Shenbao Ind and Sinosteel Luonai 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 Sinosteel Luonai Materials are associated (or correlated) with Shenzhen Shenbao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Shenbao Ind has no effect on the direction of Sinosteel Luonai i.e., Sinosteel Luonai and Shenzhen Shenbao go up and down completely randomly.
Pair Corralation between Sinosteel Luonai and Shenzhen Shenbao
Assuming the 90 days trading horizon Sinosteel Luonai Materials is expected to generate 1.57 times more return on investment than Shenzhen Shenbao. However, Sinosteel Luonai is 1.57 times more volatile than Shenzhen Shenbao Industrial. It trades about 0.2 of its potential returns per unit of risk. Shenzhen Shenbao Industrial is currently generating about 0.18 per unit of risk. If you would invest 298.00 in Sinosteel Luonai Materials on September 12, 2024 and sell it today you would earn a total of 141.00 from holding Sinosteel Luonai Materials or generate 47.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinosteel Luonai Materials vs. Shenzhen Shenbao Industrial
Performance |
| Timeline |
| Sinosteel Luonai Mat |
| Shenzhen Shenbao Ind |
Sinosteel Luonai and Shenzhen Shenbao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinosteel Luonai and Shenzhen Shenbao
The main advantage of trading using opposite Sinosteel Luonai and Shenzhen Shenbao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinosteel Luonai position performs unexpectedly, Shenzhen Shenbao 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 Shenzhen Shenbao will offset losses from the drop in Shenzhen Shenbao's long position.| Sinosteel Luonai vs. Zijin Mining Group | Sinosteel Luonai vs. Wanhua Chemical Group | Sinosteel Luonai vs. Baoshan Iron Steel | Sinosteel Luonai vs. Shandong Gold Mining |
| Shenzhen Shenbao vs. Impulse Qingdao Health | Shenzhen Shenbao vs. HanS Laser Tech | Shenzhen Shenbao vs. Shuhua Sports Co | Shenzhen Shenbao vs. Humanwell Healthcare Group |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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