Correlation Between Shenyang Blue and Piotech

Can any of the company-specific risk be diversified away by investing in both Shenyang Blue and Piotech 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 Shenyang Blue and Piotech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shenyang Blue Silver and Piotech Inc A, you can compare the effects of market volatilities on Shenyang Blue and Piotech 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 Shenyang Blue with a short position of Piotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Blue and Piotech.

Diversification Opportunities for Shenyang Blue and Piotech

0.88

Correlation Coefficient

Shenyang Blue  Piotech

Very poor diversification

The 3 months correlation between Shenyang and Piotech is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Blue Silver and Piotech Inc A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piotech Inc A and Shenyang Blue 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 Shenyang Blue Silver are associated (or correlated) with Piotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piotech Inc A has no effect on the direction of Shenyang Blue i.e., Shenyang Blue and Piotech go up and down completely randomly.

Pair Corralation between Shenyang Blue and Piotech

Assuming the 90 days trading horizon Shenyang Blue Silver is expected to generate 1.07 times more return on investment than Piotech. However, Shenyang Blue is 1.07 times more volatile than Piotech Inc A. It trades about 0.02 of its potential returns per unit of risk. Piotech Inc A is currently generating about 0.0 per unit of risk. If you would invest  2,501  in Shenyang Blue Silver on December 22, 2024 and sell it today you would earn a total of  7.00  from holding Shenyang Blue Silver or generate 0.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Shenyang Blue Silver  vs.  Piotech Inc A

Shenyang Blue Silver

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shenyang Blue Silver are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Shenyang Blue is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Piotech Inc A

Risk-Adjusted Performance

Very Weak

Over the last 90 days Piotech Inc A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Piotech is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Shenyang Blue and Piotech

The main advantage of trading using opposite Shenyang Blue and Piotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Blue position performs unexpectedly, Piotech 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 Piotech will offset losses from the drop in Piotech's long position.

The idea behind Shenyang Blue Silver and Piotech Inc A 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.