Correlation Between China Securities and Shanghai Rongtai
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By analyzing existing cross correlation between China Securities 800 and Shanghai Rongtai Health, you can compare the effects of market volatilities on China Securities and Shanghai Rongtai 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 China Securities with a short position of Shanghai Rongtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Shanghai Rongtai.
Diversification Opportunities for China Securities and Shanghai Rongtai
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Shanghai is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Shanghai Rongtai Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Rongtai Health and China Securities 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 China Securities 800 are associated (or correlated) with Shanghai Rongtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Rongtai Health has no effect on the direction of China Securities i.e., China Securities and Shanghai Rongtai go up and down completely randomly.
Pair Corralation between China Securities and Shanghai Rongtai
Assuming the 90 days trading horizon China Securities 800 is expected to generate 0.5 times more return on investment than Shanghai Rongtai. However, China Securities 800 is 2.01 times less risky than Shanghai Rongtai. It trades about 0.04 of its potential returns per unit of risk. Shanghai Rongtai Health is currently generating about -0.05 per unit of risk. If you would invest 376,673 in China Securities 800 on August 25, 2024 and sell it today you would earn a total of 40,879 from holding China Securities 800 or generate 10.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. Shanghai Rongtai Health
Performance |
| Timeline |
China Securities and Shanghai Rongtai Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Shanghai Rongtai Health
Pair trading matchups for Shanghai Rongtai
Pair Trading with China Securities and Shanghai Rongtai
The main advantage of trading using opposite China Securities and Shanghai Rongtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Shanghai Rongtai 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 Rongtai will offset losses from the drop in Shanghai Rongtai's long position.| China Securities vs. Yuan Longping High tech | China Securities vs. Saurer Intelligent Technology | China Securities vs. Fujian Rongji Software | China Securities vs. Jinhui Liquor Co |
| Shanghai Rongtai vs. Hoshine Silicon Ind | Shanghai Rongtai vs. Agricultural Bank of | Shanghai Rongtai vs. Huatian Hotel Group | Shanghai Rongtai vs. Liuzhou Chemical Industry |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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