Correlation Between Shaanxi Broadcast and Inner Mongolia

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

Diversification Opportunities for Shaanxi Broadcast and Inner Mongolia

0.0

Correlation Coefficient

Shaanxi Broadcast  Inner Mongolia

Pay attention - limited upside

The 3 months correlation between Shaanxi and Inner is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Broadcast TV and Inner Mongolia Yitai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inner Mongolia Yitai 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 Inner Mongolia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inner Mongolia Yitai has no effect on the direction of Shaanxi Broadcast i.e., Shaanxi Broadcast and Inner Mongolia go up and down completely randomly.

Pair Corralation between Shaanxi Broadcast and Inner Mongolia

If you would invest (100.00) in Inner Mongolia Yitai on October 26, 2024 and sell it today you would earn a total of  100.00  from holding Inner Mongolia Yitai or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Shaanxi Broadcast TV  vs.  Inner Mongolia Yitai

Shaanxi Broadcast

Risk-Adjusted Performance

0 of 100

Very Weak

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

Inner Mongolia Yitai

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inner Mongolia Yitai has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Inner Mongolia 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 Inner Mongolia

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

The idea behind Shaanxi Broadcast TV and Inner Mongolia Yitai 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..