Correlation Between Shaanxi Broadcast and Shenyang Blue

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

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

Diversification Opportunities for Shaanxi Broadcast and Shenyang Blue

0.68

Correlation Coefficient

Shaanxi Broadcast  Shenyang Blue

Poor diversification

The 3 months correlation between Shaanxi and Shenyang is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Broadcast TV and Shenyang Blue Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang Blue Silver and Shaanxi Broadcast 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 Broadcast TV are associated (or correlated) with Shenyang Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenyang Blue Silver has no effect on the direction of Shaanxi Broadcast i.e., Shaanxi Broadcast and Shenyang Blue go up and down completely randomly.

Pair Corralation between Shaanxi Broadcast and Shenyang Blue

Assuming the 90 days trading horizon Shaanxi Broadcast TV is expected to generate 0.66 times more return on investment than Shenyang Blue. However, Shaanxi Broadcast TV is 1.52 times less risky than Shenyang Blue. It trades about 0.07 of its potential returns per unit of risk. Shenyang Blue Silver is currently generating about -0.02 per unit of risk. If you would invest  259.00  in Shaanxi Broadcast TV on December 26, 2024 and sell it today you would earn a total of  18.00  from holding Shaanxi Broadcast TV or generate 6.95% return on investment over 90 days.

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

Shaanxi Broadcast TV  vs.  Shenyang Blue Silver

Shaanxi Broadcast

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Shaanxi Broadcast TV are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shaanxi Broadcast may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Shenyang Blue Silver

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shenyang Blue Silver has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Shaanxi Broadcast and Shenyang Blue

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

The idea behind Shaanxi Broadcast TV and Shenyang Blue Silver 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.