Correlation Between Shaanxi Energy and Zhejiang Kingland
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By analyzing existing cross correlation between Shaanxi Energy Investment and Zhejiang Kingland Pipeline, you can compare the effects of market volatilities on Shaanxi Energy and Zhejiang Kingland 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 Shaanxi Energy with a short position of Zhejiang Kingland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Energy and Zhejiang Kingland.
Diversification Opportunities for Shaanxi Energy and Zhejiang Kingland
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shaanxi and Zhejiang is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Energy Investment and Zhejiang Kingland Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Kingland and Shaanxi Energy 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 Shaanxi Energy Investment are associated (or correlated) with Zhejiang Kingland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Kingland has no effect on the direction of Shaanxi Energy i.e., Shaanxi Energy and Zhejiang Kingland go up and down completely randomly.
Pair Corralation between Shaanxi Energy and Zhejiang Kingland
Assuming the 90 days trading horizon Shaanxi Energy Investment is expected to under-perform the Zhejiang Kingland. But the stock apears to be less risky and, when comparing its historical volatility, Shaanxi Energy Investment is 1.06 times less risky than Zhejiang Kingland. The stock trades about -0.07 of its potential returns per unit of risk. The Zhejiang Kingland Pipeline is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 548.00 in Zhejiang Kingland Pipeline on September 19, 2024 and sell it today you would earn a total of 64.00 from holding Zhejiang Kingland Pipeline or generate 11.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Shaanxi Energy Investment vs. Zhejiang Kingland Pipeline
Performance |
Timeline |
Shaanxi Energy Investment |
Zhejiang Kingland |
Shaanxi Energy and Zhejiang Kingland Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shaanxi Energy and Zhejiang Kingland
The main advantage of trading using opposite Shaanxi Energy and Zhejiang Kingland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Energy position performs unexpectedly, Zhejiang Kingland 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 Kingland will offset losses from the drop in Zhejiang Kingland's long position.Shaanxi Energy vs. Zhejiang Kingland Pipeline | Shaanxi Energy vs. HOB Biotech Group | Shaanxi Energy vs. Ming Yang Smart | Shaanxi Energy vs. 159681 |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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