Correlation Between Shanghai Lingyun and Shanxi Xishan
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By analyzing existing cross correlation between Shanghai Lingyun Industries and Shanxi Xishan Coal, you can compare the effects of market volatilities on Shanghai Lingyun and Shanxi Xishan 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 Shanghai Lingyun with a short position of Shanxi Xishan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Lingyun and Shanxi Xishan.
Diversification Opportunities for Shanghai Lingyun and Shanxi Xishan
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Shanxi is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Lingyun Industries and Shanxi Xishan Coal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanxi Xishan Coal and Shanghai Lingyun 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 Shanghai Lingyun Industries are associated (or correlated) with Shanxi Xishan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanxi Xishan Coal has no effect on the direction of Shanghai Lingyun i.e., Shanghai Lingyun and Shanxi Xishan go up and down completely randomly.
Pair Corralation between Shanghai Lingyun and Shanxi Xishan
Assuming the 90 days trading horizon Shanghai Lingyun Industries is expected to under-perform the Shanxi Xishan. In addition to that, Shanghai Lingyun is 3.56 times more volatile than Shanxi Xishan Coal. It trades about -0.22 of its total potential returns per unit of risk. Shanxi Xishan Coal is currently generating about -0.28 per unit of volatility. If you would invest 724.00 in Shanxi Xishan Coal on December 1, 2024 and sell it today you would lose (32.00) from holding Shanxi Xishan Coal or give up 4.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Lingyun Industries vs. Shanxi Xishan Coal
Performance |
| Timeline |
| Shanghai Lingyun Ind |
| Shanxi Xishan Coal |
Shanghai Lingyun and Shanxi Xishan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Lingyun and Shanxi Xishan
The main advantage of trading using opposite Shanghai Lingyun and Shanxi Xishan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Lingyun position performs unexpectedly, Shanxi Xishan 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 Xishan will offset losses from the drop in Shanxi Xishan's long position.| Shanghai Lingyun vs. Chongqing Road Bridge | Shanghai Lingyun vs. Zhengping RoadBridge Constr | Shanghai Lingyun vs. Guizhou BroadcastingTV Info | Shanghai Lingyun vs. Dazhong Transportation Group |
| Shanxi Xishan vs. Anhui Xinhua Media | Shanxi Xishan vs. Konfoong Materials International | Shanxi Xishan vs. Ningbo Tip Rubber | Shanxi Xishan vs. NBTM New Materials |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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