Correlation Between Shanghai Metersbonwe and Beijing Lier
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By analyzing existing cross correlation between Shanghai Metersbonwe FashionAccessories and Beijing Lier High, you can compare the effects of market volatilities on Shanghai Metersbonwe and Beijing Lier 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 Beijing Lier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Metersbonwe and Beijing Lier.
Diversification Opportunities for Shanghai Metersbonwe and Beijing Lier
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Beijing is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Metersbonwe FashionAc and Beijing Lier High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Lier High 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 Beijing Lier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Lier High has no effect on the direction of Shanghai Metersbonwe i.e., Shanghai Metersbonwe and Beijing Lier go up and down completely randomly.
Pair Corralation between Shanghai Metersbonwe and Beijing Lier
Assuming the 90 days trading horizon Shanghai Metersbonwe is expected to generate 1.13 times less return on investment than Beijing Lier. In addition to that, Shanghai Metersbonwe is 1.47 times more volatile than Beijing Lier High. It trades about 0.03 of its total potential returns per unit of risk. Beijing Lier High is currently generating about 0.05 per unit of volatility. If you would invest 342.00 in Beijing Lier High on September 12, 2024 and sell it today you would earn a total of 158.00 from holding Beijing Lier High or generate 46.2% 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. Beijing Lier High
Performance |
| Timeline |
| Shanghai Metersbonwe |
| Beijing Lier High |
Shanghai Metersbonwe and Beijing Lier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Metersbonwe and Beijing Lier
The main advantage of trading using opposite Shanghai Metersbonwe and Beijing Lier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Metersbonwe position performs unexpectedly, Beijing Lier 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 Beijing Lier will offset losses from the drop in Beijing Lier's long position.| Shanghai Metersbonwe vs. Lutian Machinery Co | Shanghai Metersbonwe vs. PetroChina Co Ltd | Shanghai Metersbonwe vs. Bank of China | Shanghai Metersbonwe vs. Gansu Jiu Steel |
| Beijing Lier vs. Dongfeng Automobile Co | Beijing Lier vs. Hubei Dinglong Chemical | Beijing Lier vs. Xinxiang Chemical Fiber | Beijing Lier vs. Jiangsu Xinri E Vehicle |
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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