Correlation Between China Securities and Shandong Homey
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By analyzing existing cross correlation between China Securities 800 and Shandong Homey Aquatic, you can compare the effects of market volatilities on China Securities and Shandong Homey 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 China Securities with a short position of Shandong Homey. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Shandong Homey.
Diversification Opportunities for China Securities and Shandong Homey
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Shandong is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Shandong Homey Aquatic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Homey Aquatic and China Securities 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 China Securities 800 are associated (or correlated) with Shandong Homey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Homey Aquatic has no effect on the direction of China Securities i.e., China Securities and Shandong Homey go up and down completely randomly.
Pair Corralation between China Securities and Shandong Homey
Assuming the 90 days trading horizon China Securities is expected to generate 2.42 times less return on investment than Shandong Homey. But when comparing it to its historical volatility, China Securities 800 is 1.93 times less risky than Shandong Homey. It trades about 0.19 of its potential returns per unit of risk. Shandong Homey Aquatic is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 159.00 in Shandong Homey Aquatic on September 11, 2024 and sell it today you would earn a total of 115.00 from holding Shandong Homey Aquatic or generate 72.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
China Securities 800 vs. Shandong Homey Aquatic
Performance |
Timeline |
China Securities and Shandong Homey Volatility Contrast
Predicted Return Density |
Returns |
China Securities 800
Pair trading matchups for China Securities
Shandong Homey Aquatic
Pair trading matchups for Shandong Homey
Pair Trading with China Securities and Shandong Homey
The main advantage of trading using opposite China Securities and Shandong Homey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Shandong Homey 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 Shandong Homey will offset losses from the drop in Shandong Homey's long position.China Securities vs. Heilongjiang Transport Development | China Securities vs. Nantong Haixing Electronics | China Securities vs. Shenzhen Clou Electronics | China Securities vs. Anhui Deli Household |
Shandong Homey vs. Olympic Circuit Technology | Shandong Homey vs. HUAQIN TECHNOLOGY LTD | Shandong Homey vs. Dhc Software Co | Shandong Homey vs. Linewell Software Co |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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