Correlation Between Shaanxi Broadcast and Orient Sec

Can any of the company-specific risk be diversified away by investing in both Shaanxi Broadcast and Orient Sec 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 Orient Sec 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 Orient Sec Co, you can compare the effects of market volatilities on Shaanxi Broadcast and Orient Sec 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 Orient Sec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Broadcast and Orient Sec.

Diversification Opportunities for Shaanxi Broadcast and Orient Sec

0.71

Correlation Coefficient

Shaanxi Broadcast  Orient Sec

Poor diversification

The 3 months correlation between Shaanxi and Orient is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Broadcast TV and Orient Sec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Sec 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 Orient Sec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Sec has no effect on the direction of Shaanxi Broadcast i.e., Shaanxi Broadcast and Orient Sec go up and down completely randomly.

Pair Corralation between Shaanxi Broadcast and Orient Sec

Assuming the 90 days trading horizon Shaanxi Broadcast TV is expected to generate 1.05 times more return on investment than Orient Sec. However, Shaanxi Broadcast is 1.05 times more volatile than Orient Sec Co. It trades about 0.09 of its potential returns per unit of risk. Orient Sec Co is currently generating about -0.07 per unit of risk. If you would invest  283.00  in Shaanxi Broadcast TV on September 21, 2024 and sell it today you would earn a total of  12.00  from holding Shaanxi Broadcast TV or generate 4.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

Shaanxi Broadcast TV  vs.  Orient Sec Co

Shaanxi Broadcast

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Shaanxi Broadcast TV are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shaanxi Broadcast sustained solid returns over the last few months and may actually be approaching a breakup point.

Orient Sec

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Orient Sec Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Orient Sec sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shaanxi Broadcast and Orient Sec

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

The idea behind Shaanxi Broadcast TV and Orient Sec Co 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 Commodity Directory module to find actively traded commodities issued by global exchanges.