Correlation Between Shaanxi Meineng and Everdisplay Optronics

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Can any of the company-specific risk be diversified away by investing in both Shaanxi Meineng and Everdisplay Optronics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Shaanxi Meineng and Everdisplay Optronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shaanxi Meineng Clean and Everdisplay Optronics Shanghai, you can compare the effects of market volatilities on Shaanxi Meineng and Everdisplay Optronics 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 Meineng with a short position of Everdisplay Optronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Meineng and Everdisplay Optronics.

Diversification Opportunities for Shaanxi Meineng and Everdisplay Optronics

ShaanxiEverdisplayDiversified AwayShaanxiEverdisplayDiversified Away100%
0.79
  Correlation Coefficient

Poor diversification

The 3 months correlation between Shaanxi and Everdisplay is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Meineng Clean and Everdisplay Optronics Shanghai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everdisplay Optronics and Shaanxi Meineng 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 Meineng Clean are associated (or correlated) with Everdisplay Optronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everdisplay Optronics has no effect on the direction of Shaanxi Meineng i.e., Shaanxi Meineng and Everdisplay Optronics go up and down completely randomly.

Pair Corralation between Shaanxi Meineng and Everdisplay Optronics

Assuming the 90 days trading horizon Shaanxi Meineng Clean is expected to generate 1.12 times more return on investment than Everdisplay Optronics. However, Shaanxi Meineng is 1.12 times more volatile than Everdisplay Optronics Shanghai. It trades about -0.01 of its potential returns per unit of risk. Everdisplay Optronics Shanghai is currently generating about -0.09 per unit of risk. If you would invest  1,294  in Shaanxi Meineng Clean on October 31, 2024 and sell it today you would lose (39.00) from holding Shaanxi Meineng Clean or give up 3.01% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Shaanxi Meineng Clean  vs.  Everdisplay Optronics Shanghai

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -10-5051015
JavaScript chart by amCharts 3.21.15001299 688538
       Timeline  
Shaanxi Meineng Clean 

Risk-Adjusted Performance

0 of 100

 
Weak
 
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Very Weak
Over the last 90 days Shaanxi Meineng Clean has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Shaanxi Meineng is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanJan11.51212.51313.51414.515
Everdisplay Optronics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Everdisplay Optronics Shanghai has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
JavaScript chart by amCharts 3.21.15DecJanJan2.22.32.42.52.62.72.8

Shaanxi Meineng and Everdisplay Optronics Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.57-2.67-1.78-0.880.00.871.762.653.54 0.060.070.080.09
JavaScript chart by amCharts 3.21.15001299 688538
       Returns  

Pair Trading with Shaanxi Meineng and Everdisplay Optronics

The main advantage of trading using opposite Shaanxi Meineng and Everdisplay Optronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Meineng position performs unexpectedly, Everdisplay Optronics 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 Everdisplay Optronics will offset losses from the drop in Everdisplay Optronics' long position.
The idea behind Shaanxi Meineng Clean and Everdisplay Optronics Shanghai pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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