Correlation Between National Silicon and Shanxi Lanhua
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By analyzing existing cross correlation between National Silicon Industry and Shanxi Lanhua Sci Tech, you can compare the effects of market volatilities on National Silicon and Shanxi Lanhua 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 National Silicon with a short position of Shanxi Lanhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Silicon and Shanxi Lanhua.
Diversification Opportunities for National Silicon and Shanxi Lanhua
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Shanxi is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding National Silicon Industry and Shanxi Lanhua Sci Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanxi Lanhua Sci and National Silicon 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 National Silicon Industry are associated (or correlated) with Shanxi Lanhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanxi Lanhua Sci has no effect on the direction of National Silicon i.e., National Silicon and Shanxi Lanhua go up and down completely randomly.
Pair Corralation between National Silicon and Shanxi Lanhua
Assuming the 90 days trading horizon National Silicon Industry is expected to generate 1.4 times more return on investment than Shanxi Lanhua. However, National Silicon is 1.4 times more volatile than Shanxi Lanhua Sci Tech. It trades about 0.02 of its potential returns per unit of risk. Shanxi Lanhua Sci Tech is currently generating about 0.0 per unit of risk. If you would invest 1,952 in National Silicon Industry on September 3, 2024 and sell it today you would earn a total of 213.00 from holding National Silicon Industry or generate 10.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Silicon Industry vs. Shanxi Lanhua Sci Tech
Performance |
| Timeline |
| National Silicon Industry |
| Shanxi Lanhua Sci |
National Silicon and Shanxi Lanhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Silicon and Shanxi Lanhua
The main advantage of trading using opposite National Silicon and Shanxi Lanhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Silicon position performs unexpectedly, Shanxi Lanhua 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 Shanxi Lanhua will offset losses from the drop in Shanxi Lanhua's long position.| National Silicon vs. Agricultural Bank of | National Silicon vs. China Construction Bank | National Silicon vs. Postal Savings Bank | National Silicon vs. Bank of Communications |
| Shanxi Lanhua vs. Gansu Jiu Steel | Shanxi Lanhua vs. Ming Yang Smart | Shanxi Lanhua vs. Aba Chemicals Corp | Shanxi Lanhua vs. Loctek Ergonomic Technology |
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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