Correlation Between Shijiazhuang Tonhe and China State
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By analyzing existing cross correlation between Shijiazhuang Tonhe Electronics and China State Construction, you can compare the effects of market volatilities on Shijiazhuang Tonhe and China State 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 Shijiazhuang Tonhe with a short position of China State. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shijiazhuang Tonhe and China State.
Diversification Opportunities for Shijiazhuang Tonhe and China State
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shijiazhuang and China is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Shijiazhuang Tonhe Electronics and China State Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China State Construction and Shijiazhuang Tonhe 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 Shijiazhuang Tonhe Electronics are associated (or correlated) with China State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China State Construction has no effect on the direction of Shijiazhuang Tonhe i.e., Shijiazhuang Tonhe and China State go up and down completely randomly.
Pair Corralation between Shijiazhuang Tonhe and China State
Assuming the 90 days trading horizon Shijiazhuang Tonhe Electronics is expected to generate 2.73 times more return on investment than China State. However, Shijiazhuang Tonhe is 2.73 times more volatile than China State Construction. It trades about 0.06 of its potential returns per unit of risk. China State Construction is currently generating about 0.09 per unit of risk. If you would invest 1,676 in Shijiazhuang Tonhe Electronics on September 24, 2024 and sell it today you would earn a total of 41.00 from holding Shijiazhuang Tonhe Electronics or generate 2.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Shijiazhuang Tonhe Electronics vs. China State Construction
Performance |
Timeline |
Shijiazhuang Tonhe |
China State Construction |
Shijiazhuang Tonhe and China State Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shijiazhuang Tonhe and China State
The main advantage of trading using opposite Shijiazhuang Tonhe and China State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shijiazhuang Tonhe position performs unexpectedly, China State 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 China State will offset losses from the drop in China State's long position.Shijiazhuang Tonhe vs. PetroChina Co Ltd | Shijiazhuang Tonhe vs. China Mobile Limited | Shijiazhuang Tonhe vs. CNOOC Limited | Shijiazhuang Tonhe vs. Ping An Insurance |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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