Correlation Between Industrial and Shantui Construction
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By analyzing existing cross correlation between Industrial and Commercial and Shantui Construction Machinery, you can compare the effects of market volatilities on Industrial and Shantui Construction 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 Industrial with a short position of Shantui Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Shantui Construction.
Diversification Opportunities for Industrial and Shantui Construction
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Industrial and Shantui is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and Shantui Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shantui Construction and Industrial 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 Industrial and Commercial are associated (or correlated) with Shantui Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shantui Construction has no effect on the direction of Industrial i.e., Industrial and Shantui Construction go up and down completely randomly.
Pair Corralation between Industrial and Shantui Construction
Assuming the 90 days trading horizon Industrial is expected to generate 3.64 times less return on investment than Shantui Construction. But when comparing it to its historical volatility, Industrial and Commercial is 3.17 times less risky than Shantui Construction. It trades about 0.15 of its potential returns per unit of risk. Shantui Construction Machinery is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 768.00 in Shantui Construction Machinery on September 23, 2024 and sell it today you would earn a total of 180.00 from holding Shantui Construction Machinery or generate 23.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Industrial and Commercial vs. Shantui Construction Machinery
Performance |
Timeline |
Industrial and Commercial |
Shantui Construction |
Industrial and Shantui Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Industrial and Shantui Construction
The main advantage of trading using opposite Industrial and Shantui Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, Shantui Construction 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 Shantui Construction will offset losses from the drop in Shantui Construction's long position.Industrial vs. Kweichow Moutai Co | Industrial vs. Agricultural Bank of | Industrial vs. China Mobile Limited | Industrial vs. China Construction Bank |
Shantui Construction vs. Industrial and Commercial | Shantui Construction vs. Agricultural Bank of | Shantui Construction vs. China Construction Bank | Shantui Construction vs. Bank of China |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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