Correlation Between Cangzhou Mingzhu and Shanghai Material
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By analyzing existing cross correlation between Cangzhou Mingzhu Plastic and Shanghai Material Trading, you can compare the effects of market volatilities on Cangzhou Mingzhu and Shanghai Material 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 Cangzhou Mingzhu with a short position of Shanghai Material. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cangzhou Mingzhu and Shanghai Material.
Diversification Opportunities for Cangzhou Mingzhu and Shanghai Material
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cangzhou and Shanghai is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Cangzhou Mingzhu Plastic and Shanghai Material Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Material Trading and Cangzhou Mingzhu 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 Cangzhou Mingzhu Plastic are associated (or correlated) with Shanghai Material. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Material Trading has no effect on the direction of Cangzhou Mingzhu i.e., Cangzhou Mingzhu and Shanghai Material go up and down completely randomly.
Pair Corralation between Cangzhou Mingzhu and Shanghai Material
Assuming the 90 days trading horizon Cangzhou Mingzhu is expected to generate 1.53 times less return on investment than Shanghai Material. But when comparing it to its historical volatility, Cangzhou Mingzhu Plastic is 1.61 times less risky than Shanghai Material. It trades about 0.19 of its potential returns per unit of risk. Shanghai Material Trading is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 954.00 in Shanghai Material Trading on September 5, 2024 and sell it today you would earn a total of 183.00 from holding Shanghai Material Trading or generate 19.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cangzhou Mingzhu Plastic vs. Shanghai Material Trading
Performance |
| Timeline |
| Cangzhou Mingzhu Plastic |
| Shanghai Material Trading |
Cangzhou Mingzhu and Shanghai Material Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cangzhou Mingzhu and Shanghai Material
The main advantage of trading using opposite Cangzhou Mingzhu and Shanghai Material positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cangzhou Mingzhu position performs unexpectedly, Shanghai Material 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 Material will offset losses from the drop in Shanghai Material's long position.| Cangzhou Mingzhu vs. Zhejiang Kingland Pipeline | Cangzhou Mingzhu vs. Air China Ltd | Cangzhou Mingzhu vs. Fujian Forecam Optics | Cangzhou Mingzhu vs. iSoftStone Information Technology |
| Shanghai Material vs. Cangzhou Mingzhu Plastic | Shanghai Material vs. Sobute New Materials | Shanghai Material vs. Hangzhou Gaoxin Rubber | Shanghai Material vs. Guangzhou Tinci Materials |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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