Correlation Between Shanghai Metersbonwe and ChengDu Hi
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By analyzing existing cross correlation between Shanghai Metersbonwe FashionAccessories and ChengDu Hi Tech Development, you can compare the effects of market volatilities on Shanghai Metersbonwe and ChengDu Hi 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 Shanghai Metersbonwe with a short position of ChengDu Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Metersbonwe and ChengDu Hi.
Diversification Opportunities for Shanghai Metersbonwe and ChengDu Hi
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and ChengDu is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Metersbonwe FashionAc and ChengDu Hi Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChengDu Hi Tech and Shanghai Metersbonwe 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 Shanghai Metersbonwe FashionAccessories are associated (or correlated) with ChengDu Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChengDu Hi Tech has no effect on the direction of Shanghai Metersbonwe i.e., Shanghai Metersbonwe and ChengDu Hi go up and down completely randomly.
Pair Corralation between Shanghai Metersbonwe and ChengDu Hi
Assuming the 90 days trading horizon Shanghai Metersbonwe is expected to generate 17.75 times less return on investment than ChengDu Hi. But when comparing it to its historical volatility, Shanghai Metersbonwe FashionAccessories is 1.38 times less risky than ChengDu Hi. It trades about 0.01 of its potential returns per unit of risk. ChengDu Hi Tech Development is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,213 in ChengDu Hi Tech Development on September 3, 2024 and sell it today you would earn a total of 4,689 from holding ChengDu Hi Tech Development or generate 386.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Metersbonwe FashionAc vs. ChengDu Hi Tech Development
Performance |
| Timeline |
| Shanghai Metersbonwe |
| ChengDu Hi Tech |
Shanghai Metersbonwe and ChengDu Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Metersbonwe and ChengDu Hi
The main advantage of trading using opposite Shanghai Metersbonwe and ChengDu Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Metersbonwe position performs unexpectedly, ChengDu Hi 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 ChengDu Hi will offset losses from the drop in ChengDu Hi's long position.| Shanghai Metersbonwe vs. PetroChina Co Ltd | Shanghai Metersbonwe vs. China Mobile Limited | Shanghai Metersbonwe vs. Industrial and Commercial | Shanghai Metersbonwe vs. China Life Insurance |
| ChengDu Hi vs. Industrial and Commercial | ChengDu Hi vs. China Construction Bank | ChengDu Hi vs. Bank of China | ChengDu Hi vs. Agricultural Bank of |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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