Correlation Between Shanghai Lingyun and Zhejiang Kingland
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By analyzing existing cross correlation between Shanghai Lingyun Industries and Zhejiang Kingland Pipeline, you can compare the effects of market volatilities on Shanghai Lingyun and Zhejiang Kingland 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 Shanghai Lingyun with a short position of Zhejiang Kingland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Lingyun and Zhejiang Kingland.
Diversification Opportunities for Shanghai Lingyun and Zhejiang Kingland
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Zhejiang is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Lingyun Industries and Zhejiang Kingland Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Kingland and Shanghai Lingyun 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 Shanghai Lingyun Industries are associated (or correlated) with Zhejiang Kingland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Kingland has no effect on the direction of Shanghai Lingyun i.e., Shanghai Lingyun and Zhejiang Kingland go up and down completely randomly.
Pair Corralation between Shanghai Lingyun and Zhejiang Kingland
Assuming the 90 days trading horizon Shanghai Lingyun Industries is expected to generate 1.72 times more return on investment than Zhejiang Kingland. However, Shanghai Lingyun is 1.72 times more volatile than Zhejiang Kingland Pipeline. It trades about 0.17 of its potential returns per unit of risk. Zhejiang Kingland Pipeline is currently generating about 0.16 per unit of risk. If you would invest 27.00 in Shanghai Lingyun Industries on September 12, 2024 and sell it today you would earn a total of 13.00 from holding Shanghai Lingyun Industries or generate 48.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Shanghai Lingyun Industries vs. Zhejiang Kingland Pipeline
Performance |
Timeline |
Shanghai Lingyun Ind |
Zhejiang Kingland |
Shanghai Lingyun and Zhejiang Kingland Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shanghai Lingyun and Zhejiang Kingland
The main advantage of trading using opposite Shanghai Lingyun and Zhejiang Kingland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Lingyun position performs unexpectedly, Zhejiang Kingland 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 Zhejiang Kingland will offset losses from the drop in Zhejiang Kingland's long position.Shanghai Lingyun vs. State Grid InformationCommunication | Shanghai Lingyun vs. Innovative Medical Management | Shanghai Lingyun vs. Songz Automobile Air | Shanghai Lingyun vs. Haima Automobile Group |
Zhejiang Kingland vs. Gansu Jiu Steel | Zhejiang Kingland vs. Shandong Mining Machinery | Zhejiang Kingland vs. Aba Chemicals Corp | Zhejiang Kingland vs. BlueFocus Communication Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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