Correlation Between ChengDu Hi and Beijing Shanghai
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By analyzing existing cross correlation between ChengDu Hi Tech Development and Beijing Shanghai High Speed, you can compare the effects of market volatilities on ChengDu Hi and Beijing Shanghai 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 ChengDu Hi with a short position of Beijing Shanghai. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChengDu Hi and Beijing Shanghai.
Diversification Opportunities for ChengDu Hi and Beijing Shanghai
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ChengDu and Beijing is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding ChengDu Hi Tech Development and Beijing Shanghai High Speed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Shanghai High and ChengDu Hi 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 ChengDu Hi Tech Development are associated (or correlated) with Beijing Shanghai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Shanghai High has no effect on the direction of ChengDu Hi i.e., ChengDu Hi and Beijing Shanghai go up and down completely randomly.
Pair Corralation between ChengDu Hi and Beijing Shanghai
Assuming the 90 days trading horizon ChengDu Hi Tech Development is expected to generate 3.1 times more return on investment than Beijing Shanghai. However, ChengDu Hi is 3.1 times more volatile than Beijing Shanghai High Speed. It trades about 0.1 of its potential returns per unit of risk. Beijing Shanghai High Speed is currently generating about 0.03 per unit of risk. If you would invest 1,221 in ChengDu Hi Tech Development on August 29, 2024 and sell it today you would earn a total of 4,558 from holding ChengDu Hi Tech Development or generate 373.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChengDu Hi Tech Development vs. Beijing Shanghai High Speed
Performance |
| Timeline |
| ChengDu Hi Tech |
| Beijing Shanghai High |
ChengDu Hi and Beijing Shanghai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChengDu Hi and Beijing Shanghai
The main advantage of trading using opposite ChengDu Hi and Beijing Shanghai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChengDu Hi position performs unexpectedly, Beijing Shanghai 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 Beijing Shanghai will offset losses from the drop in Beijing Shanghai's long position.| ChengDu Hi vs. Changchun Faway Automobile | ChengDu Hi vs. Chongqing Changan Automobile | ChengDu Hi vs. Anhui Jianghuai Automobile | ChengDu Hi vs. Dongfeng Automobile Co |
| Beijing Shanghai vs. Yonyou Auto Information | Beijing Shanghai vs. Digital China Information | Beijing Shanghai vs. Jiaozuo Wanfang Aluminum | Beijing Shanghai vs. Anhui Transport Consulting |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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