Correlation Between Zhongshan Broad-Ocean and Shanghai Electric
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By analyzing existing cross correlation between Zhongshan Broad Ocean Motor and Shanghai Electric Group, you can compare the effects of market volatilities on Zhongshan Broad-Ocean and Shanghai Electric 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 Broad-Ocean with a short position of Shanghai Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongshan Broad-Ocean and Shanghai Electric.
Diversification Opportunities for Zhongshan Broad-Ocean and Shanghai Electric
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhongshan and Shanghai is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Zhongshan Broad Ocean Motor and Shanghai Electric Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Electric and Zhongshan Broad-Ocean 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 Broad Ocean Motor are associated (or correlated) with Shanghai Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Electric has no effect on the direction of Zhongshan Broad-Ocean i.e., Zhongshan Broad-Ocean and Shanghai Electric go up and down completely randomly.
Pair Corralation between Zhongshan Broad-Ocean and Shanghai Electric
Assuming the 90 days trading horizon Zhongshan Broad-Ocean is expected to generate 5.17 times less return on investment than Shanghai Electric. But when comparing it to its historical volatility, Zhongshan Broad Ocean Motor is 2.51 times less risky than Shanghai Electric. It trades about 0.14 of its potential returns per unit of risk. Shanghai Electric Group is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 365.00 in Shanghai Electric Group on September 2, 2024 and sell it today you would earn a total of 485.00 from holding Shanghai Electric Group or generate 132.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongshan Broad Ocean Motor vs. Shanghai Electric Group
Performance |
| Timeline |
| Zhongshan Broad Ocean |
| Shanghai Electric |
Zhongshan Broad-Ocean and Shanghai Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongshan Broad-Ocean and Shanghai Electric
The main advantage of trading using opposite Zhongshan Broad-Ocean and Shanghai Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongshan Broad-Ocean position performs unexpectedly, Shanghai Electric 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 Electric will offset losses from the drop in Shanghai Electric's long position.| Zhongshan Broad-Ocean vs. Bosera ChiNext ETF | Zhongshan Broad-Ocean vs. Gansu Jiu Steel | Zhongshan Broad-Ocean vs. Shenzhen MTC Co | Zhongshan Broad-Ocean vs. Ming Yang Smart |
| Shanghai Electric vs. New China Life | Shanghai Electric vs. Ming Yang Smart | Shanghai Electric vs. 159681 | Shanghai Electric vs. 159005 |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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