Correlation Between Shuang Bang and Skardin Industrial
Can any of the company-specific risk be diversified away by investing in both Shuang Bang and Skardin Industrial 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 Shuang Bang and Skardin Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shuang Bang Industrial and Skardin Industrial, you can compare the effects of market volatilities on Shuang Bang and Skardin Industrial 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 Shuang Bang with a short position of Skardin Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuang Bang and Skardin Industrial.
Diversification Opportunities for Shuang Bang and Skardin Industrial
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shuang and Skardin is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Shuang Bang Industrial and Skardin Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skardin Industrial and Shuang Bang 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 Shuang Bang Industrial are associated (or correlated) with Skardin Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skardin Industrial has no effect on the direction of Shuang Bang i.e., Shuang Bang and Skardin Industrial go up and down completely randomly.
Pair Corralation between Shuang Bang and Skardin Industrial
Assuming the 90 days trading horizon Shuang Bang Industrial is expected to generate 0.34 times more return on investment than Skardin Industrial. However, Shuang Bang Industrial is 2.93 times less risky than Skardin Industrial. It trades about 0.0 of its potential returns per unit of risk. Skardin Industrial is currently generating about -0.07 per unit of risk. If you would invest 1,680 in Shuang Bang Industrial on December 30, 2024 and sell it today you would lose (5.00) from holding Shuang Bang Industrial or give up 0.3% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Shuang Bang Industrial vs. Skardin Industrial
Performance |
Timeline |
Shuang Bang Industrial |
Skardin Industrial |
Shuang Bang and Skardin Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shuang Bang and Skardin Industrial
The main advantage of trading using opposite Shuang Bang and Skardin Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuang Bang position performs unexpectedly, Skardin Industrial 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 Skardin Industrial will offset losses from the drop in Skardin Industrial's long position.Shuang Bang vs. Great China Metal | Shuang Bang vs. Chernan Metal Industrial | Shuang Bang vs. WinMate Communication INC | Shuang Bang vs. Sunspring Metal Corp |
Skardin Industrial vs. Gigasolar Materials | Skardin Industrial vs. Daxin Materials Corp | Skardin Industrial vs. Formosan Rubber Group | Skardin Industrial vs. China General Plastics |
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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