Correlation Between Changchun and Shanghai OPM
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By analyzing existing cross correlation between Changchun UP Optotech and Shanghai OPM Biosciences, you can compare the effects of market volatilities on Changchun and Shanghai OPM 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 Shanghai OPM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun and Shanghai OPM.
Diversification Opportunities for Changchun and Shanghai OPM
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Changchun and Shanghai is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Changchun UP Optotech and Shanghai OPM Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai OPM Biosciences 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 Shanghai OPM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai OPM Biosciences has no effect on the direction of Changchun i.e., Changchun and Shanghai OPM go up and down completely randomly.
Pair Corralation between Changchun and Shanghai OPM
Assuming the 90 days trading horizon Changchun UP Optotech is expected to under-perform the Shanghai OPM. In addition to that, Changchun is 1.23 times more volatile than Shanghai OPM Biosciences. It trades about -0.21 of its total potential returns per unit of risk. Shanghai OPM Biosciences is currently generating about 0.01 per unit of volatility. If you would invest 4,395 in Shanghai OPM Biosciences on September 13, 2024 and sell it today you would lose (22.00) from holding Shanghai OPM Biosciences or give up 0.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun UP Optotech vs. Shanghai OPM Biosciences
Performance |
| Timeline |
| Changchun UP Optotech |
| Shanghai OPM Biosciences |
Changchun and Shanghai OPM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun and Shanghai OPM
The main advantage of trading using opposite Changchun and Shanghai OPM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun position performs unexpectedly, Shanghai OPM 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 Shanghai OPM will offset losses from the drop in Shanghai OPM's long position.| Changchun vs. China Life Insurance | Changchun vs. Cinda Securities Co | Changchun vs. Piotech Inc A | Changchun vs. Dongxing Sec Co |
| Shanghai OPM vs. Beijing Yanjing Brewery | Shanghai OPM vs. ZYF Lopsking Aluminum | Shanghai OPM vs. Spring Airlines Co | Shanghai OPM vs. Hefei Metalforming Mach |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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