Correlation Between Shanghai Metersbonwe and Hua Xia
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By analyzing existing cross correlation between Shanghai Metersbonwe FashionAccessories and Hua Xia Bank, you can compare the effects of market volatilities on Shanghai Metersbonwe and Hua Xia 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 Hua Xia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Metersbonwe and Hua Xia.
Diversification Opportunities for Shanghai Metersbonwe and Hua Xia
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Hua is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Metersbonwe FashionAc and Hua Xia Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Xia Bank 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 Hua Xia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Xia Bank has no effect on the direction of Shanghai Metersbonwe i.e., Shanghai Metersbonwe and Hua Xia go up and down completely randomly.
Pair Corralation between Shanghai Metersbonwe and Hua Xia
Assuming the 90 days trading horizon Shanghai Metersbonwe FashionAccessories is expected to generate 2.09 times more return on investment than Hua Xia. However, Shanghai Metersbonwe is 2.09 times more volatile than Hua Xia Bank. It trades about 0.26 of its potential returns per unit of risk. Hua Xia Bank is currently generating about 0.19 per unit of risk. If you would invest 140.00 in Shanghai Metersbonwe FashionAccessories on September 12, 2024 and sell it today you would earn a total of 124.00 from holding Shanghai Metersbonwe FashionAccessories or generate 88.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Metersbonwe FashionAc vs. Hua Xia Bank
Performance |
| Timeline |
| Shanghai Metersbonwe |
| Hua Xia Bank |
Shanghai Metersbonwe and Hua Xia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Metersbonwe and Hua Xia
The main advantage of trading using opposite Shanghai Metersbonwe and Hua Xia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Metersbonwe position performs unexpectedly, Hua Xia 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 Hua Xia will offset losses from the drop in Hua Xia's long position.| Shanghai Metersbonwe vs. Industrial and Commercial | Shanghai Metersbonwe vs. Agricultural Bank of | Shanghai Metersbonwe vs. China Construction Bank | Shanghai Metersbonwe vs. Bank of China |
| Hua Xia vs. Industrial and Commercial | Hua Xia vs. China Construction Bank | Hua Xia vs. Bank of China | Hua Xia 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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