Correlation Between Zhongshan Public and Shanghai Action
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By analyzing existing cross correlation between Zhongshan Public Utilities and Shanghai Action Education, you can compare the effects of market volatilities on Zhongshan Public and Shanghai Action 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 Zhongshan Public with a short position of Shanghai Action. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongshan Public and Shanghai Action.
Diversification Opportunities for Zhongshan Public and Shanghai Action
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhongshan and Shanghai is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Zhongshan Public Utilities and Shanghai Action Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Action Education and Zhongshan Public 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 Zhongshan Public Utilities are associated (or correlated) with Shanghai Action. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Action Education has no effect on the direction of Zhongshan Public i.e., Zhongshan Public and Shanghai Action go up and down completely randomly.
Pair Corralation between Zhongshan Public and Shanghai Action
Assuming the 90 days trading horizon Zhongshan Public is expected to generate 7.09 times less return on investment than Shanghai Action. But when comparing it to its historical volatility, Zhongshan Public Utilities is 1.83 times less risky than Shanghai Action. It trades about 0.02 of its potential returns per unit of risk. Shanghai Action Education is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,508 in Shanghai Action Education on September 13, 2024 and sell it today you would earn a total of 119.00 from holding Shanghai Action Education or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongshan Public Utilities vs. Shanghai Action Education
Performance |
| Timeline |
| Zhongshan Public Uti |
| Shanghai Action Education |
Zhongshan Public and Shanghai Action Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongshan Public and Shanghai Action
The main advantage of trading using opposite Zhongshan Public and Shanghai Action positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongshan Public position performs unexpectedly, Shanghai Action 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 Action will offset losses from the drop in Shanghai Action's long position.| Zhongshan Public vs. Ningbo Tip Rubber | Zhongshan Public vs. Western Mining Co | Zhongshan Public vs. Cangzhou Mingzhu Plastic | Zhongshan Public vs. Chongqing Sulian Plastic |
| Shanghai Action vs. SUNSEA Telecommunications Co | Shanghai Action vs. Xinjiang Communications Construction | Shanghai Action vs. Anji Foodstuff Co | Shanghai Action vs. Shanghai Ziyan Foods |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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