Correlation Between Shanghai Metersbonwe and China Construction
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By analyzing existing cross correlation between Shanghai Metersbonwe FashionAccessories and China Construction Bank, you can compare the effects of market volatilities on Shanghai Metersbonwe and China Construction 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 China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Metersbonwe and China Construction.
Diversification Opportunities for Shanghai Metersbonwe and China Construction
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and China is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Metersbonwe FashionAc and China Construction Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Construction 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 China Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Construction Bank has no effect on the direction of Shanghai Metersbonwe i.e., Shanghai Metersbonwe and China Construction go up and down completely randomly.
Pair Corralation between Shanghai Metersbonwe and China Construction
Assuming the 90 days trading horizon Shanghai Metersbonwe FashionAccessories is expected to generate 6.13 times more return on investment than China Construction. However, Shanghai Metersbonwe is 6.13 times more volatile than China Construction Bank. It trades about 0.24 of its potential returns per unit of risk. China Construction Bank is currently generating about 0.28 per unit of risk. If you would invest 195.00 in Shanghai Metersbonwe FashionAccessories on September 13, 2024 and sell it today you would earn a total of 63.00 from holding Shanghai Metersbonwe FashionAccessories or generate 32.31% 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. China Construction Bank
Performance |
| Timeline |
| Shanghai Metersbonwe |
| China Construction Bank |
Shanghai Metersbonwe and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Metersbonwe and China Construction
The main advantage of trading using opposite Shanghai Metersbonwe and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Metersbonwe position performs unexpectedly, China Construction 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 China Construction will offset losses from the drop in China Construction'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 |
| China Construction vs. Tongyu Communication | China Construction vs. Zhongtong Guomai Communication | China Construction vs. Changchun Faway Automobile | China Construction vs. Allwin Telecommunication Co |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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