Correlation Between Hunan Valin and Shanghai Shuixing
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By analyzing existing cross correlation between Hunan Valin Steel and Shanghai Shuixing Home, you can compare the effects of market volatilities on Hunan Valin and Shanghai Shuixing 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 Hunan Valin with a short position of Shanghai Shuixing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Valin and Shanghai Shuixing.
Diversification Opportunities for Hunan Valin and Shanghai Shuixing
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hunan and Shanghai is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Valin Steel and Shanghai Shuixing Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Shuixing Home and Hunan Valin 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 Hunan Valin Steel are associated (or correlated) with Shanghai Shuixing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Shuixing Home has no effect on the direction of Hunan Valin i.e., Hunan Valin and Shanghai Shuixing go up and down completely randomly.
Pair Corralation between Hunan Valin and Shanghai Shuixing
Assuming the 90 days trading horizon Hunan Valin is expected to generate 7.63 times less return on investment than Shanghai Shuixing. But when comparing it to its historical volatility, Hunan Valin Steel is 1.89 times less risky than Shanghai Shuixing. It trades about 0.06 of its potential returns per unit of risk. Shanghai Shuixing Home is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,384 in Shanghai Shuixing Home on September 13, 2024 and sell it today you would earn a total of 256.00 from holding Shanghai Shuixing Home or generate 18.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hunan Valin Steel vs. Shanghai Shuixing Home
Performance |
| Timeline |
| Hunan Valin Steel |
| Shanghai Shuixing Home |
Hunan Valin and Shanghai Shuixing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Valin and Shanghai Shuixing
The main advantage of trading using opposite Hunan Valin and Shanghai Shuixing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Valin position performs unexpectedly, Shanghai Shuixing 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 Shuixing will offset losses from the drop in Shanghai Shuixing's long position.| Hunan Valin vs. Shanghai Shuixing Home | Hunan Valin vs. Quectel Wireless Solutions | Hunan Valin vs. Shenzhen Topway Video | Hunan Valin vs. Mengtian Home Group |
| Shanghai Shuixing vs. Nanjing Putian Telecommunications | Shanghai Shuixing vs. Tianjin Realty Development | Shanghai Shuixing vs. Kangyue Technology Co | Shanghai Shuixing vs. Shenzhen Hifuture Electric |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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