Correlation Between Changchun and Shantou Wanshun
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By analyzing existing cross correlation between Changchun UP Optotech and Shantou Wanshun Package, you can compare the effects of market volatilities on Changchun and Shantou Wanshun 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 Changchun with a short position of Shantou Wanshun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun and Shantou Wanshun.
Diversification Opportunities for Changchun and Shantou Wanshun
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changchun and Shantou is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Changchun UP Optotech and Shantou Wanshun Package in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shantou Wanshun Package and Changchun 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 Changchun UP Optotech are associated (or correlated) with Shantou Wanshun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shantou Wanshun Package has no effect on the direction of Changchun i.e., Changchun and Shantou Wanshun go up and down completely randomly.
Pair Corralation between Changchun and Shantou Wanshun
Assuming the 90 days trading horizon Changchun UP Optotech is expected to generate 1.16 times more return on investment than Shantou Wanshun. However, Changchun is 1.16 times more volatile than Shantou Wanshun Package. It trades about -0.04 of its potential returns per unit of risk. Shantou Wanshun Package is currently generating about -0.18 per unit of risk. If you would invest 4,081 in Changchun UP Optotech on September 29, 2024 and sell it today you would lose (101.00) from holding Changchun UP Optotech or give up 2.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun UP Optotech vs. Shantou Wanshun Package
Performance |
| Timeline |
| Changchun UP Optotech |
| Shantou Wanshun Package |
Changchun and Shantou Wanshun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun and Shantou Wanshun
The main advantage of trading using opposite Changchun and Shantou Wanshun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun position performs unexpectedly, Shantou Wanshun 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 Shantou Wanshun will offset losses from the drop in Shantou Wanshun's long position.| Changchun vs. Cultural Investment Holdings | Changchun vs. Gome Telecom Equipment | Changchun vs. Bus Online Co | Changchun vs. Holitech Technology Co |
| Shantou Wanshun vs. Zijin Mining Group | Shantou Wanshun vs. Wanhua Chemical Group | Shantou Wanshun vs. Baoshan Iron Steel | Shantou Wanshun vs. Shandong Gold Mining |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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