Correlation Between ADAMA and Shanghai Bailian
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By analyzing existing cross correlation between ADAMA and Shanghai Bailian Group, you can compare the effects of market volatilities on ADAMA and Shanghai Bailian 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 ADAMA with a short position of Shanghai Bailian. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADAMA and Shanghai Bailian.
Diversification Opportunities for ADAMA and Shanghai Bailian
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ADAMA and Shanghai is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding ADAMA and Shanghai Bailian Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Bailian and ADAMA 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 ADAMA are associated (or correlated) with Shanghai Bailian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Bailian has no effect on the direction of ADAMA i.e., ADAMA and Shanghai Bailian go up and down completely randomly.
Pair Corralation between ADAMA and Shanghai Bailian
Assuming the 90 days trading horizon ADAMA is expected to generate 1.37 times less return on investment than Shanghai Bailian. In addition to that, ADAMA is 1.5 times more volatile than Shanghai Bailian Group. It trades about 0.11 of its total potential returns per unit of risk. Shanghai Bailian Group is currently generating about 0.23 per unit of volatility. If you would invest 52.00 in Shanghai Bailian Group on August 30, 2024 and sell it today you would earn a total of 16.00 from holding Shanghai Bailian Group or generate 30.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADAMA vs. Shanghai Bailian Group
Performance |
| Timeline |
| ADAMA |
| Shanghai Bailian |
ADAMA and Shanghai Bailian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADAMA and Shanghai Bailian
The main advantage of trading using opposite ADAMA and Shanghai Bailian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADAMA position performs unexpectedly, Shanghai Bailian 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 Shanghai Bailian will offset losses from the drop in Shanghai Bailian's long position.| ADAMA vs. Zijin Mining Group | ADAMA vs. Wanhua Chemical Group | ADAMA vs. Baoshan Iron Steel | ADAMA vs. Shandong Gold Mining |
| Shanghai Bailian vs. Jinhe Biotechnology Co | Shanghai Bailian vs. Changchun BCHT Biotechnology | Shanghai Bailian vs. Bomesc Offshore Engineering | Shanghai Bailian vs. Healthcare Co |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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