Correlation Between Shandong and Zhejiang Construction
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By analyzing existing cross correlation between Shandong Hi Speed RoadBridge and Zhejiang Construction Investment, you can compare the effects of market volatilities on Shandong and Zhejiang Construction 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 Shandong with a short position of Zhejiang Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong and Zhejiang Construction.
Diversification Opportunities for Shandong and Zhejiang Construction
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Zhejiang is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Hi Speed RoadBridge and Zhejiang Construction Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Construction and Shandong 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 Shandong Hi Speed RoadBridge are associated (or correlated) with Zhejiang Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Construction has no effect on the direction of Shandong i.e., Shandong and Zhejiang Construction go up and down completely randomly.
Pair Corralation between Shandong and Zhejiang Construction
Assuming the 90 days trading horizon Shandong Hi Speed RoadBridge is expected to generate 0.61 times more return on investment than Zhejiang Construction. However, Shandong Hi Speed RoadBridge is 1.64 times less risky than Zhejiang Construction. It trades about 0.01 of its potential returns per unit of risk. Zhejiang Construction Investment is currently generating about -0.02 per unit of risk. If you would invest 621.00 in Shandong Hi Speed RoadBridge on September 26, 2024 and sell it today you would lose (11.00) from holding Shandong Hi Speed RoadBridge or give up 1.77% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 99.66% |
Values | Daily Returns |
Shandong Hi Speed RoadBridge vs. Zhejiang Construction Investme
Performance |
Timeline |
Shandong Hi Speed |
Zhejiang Construction |
Shandong and Zhejiang Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shandong and Zhejiang Construction
The main advantage of trading using opposite Shandong and Zhejiang Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong position performs unexpectedly, Zhejiang Construction 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 Zhejiang Construction will offset losses from the drop in Zhejiang Construction's long position.Shandong vs. Ming Yang Smart | Shandong vs. 159681 | Shandong vs. 159005 | Shandong 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 Stocks Directory module to find actively traded stocks across global markets.
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