Correlation Between Sichuan Fulin and Shanghai Pudong
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By analyzing existing cross correlation between Sichuan Fulin Transportation and Shanghai Pudong Development, you can compare the effects of market volatilities on Sichuan Fulin and Shanghai Pudong 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 Sichuan Fulin with a short position of Shanghai Pudong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Fulin and Shanghai Pudong.
Diversification Opportunities for Sichuan Fulin and Shanghai Pudong
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sichuan and Shanghai is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Fulin Transportation and Shanghai Pudong Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Pudong Deve and Sichuan Fulin 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 Sichuan Fulin Transportation are associated (or correlated) with Shanghai Pudong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Pudong Deve has no effect on the direction of Sichuan Fulin i.e., Sichuan Fulin and Shanghai Pudong go up and down completely randomly.
Pair Corralation between Sichuan Fulin and Shanghai Pudong
Assuming the 90 days trading horizon Sichuan Fulin Transportation is expected to generate 2.07 times more return on investment than Shanghai Pudong. However, Sichuan Fulin is 2.07 times more volatile than Shanghai Pudong Development. It trades about 0.06 of its potential returns per unit of risk. Shanghai Pudong Development is currently generating about 0.13 per unit of risk. If you would invest 521.00 in Sichuan Fulin Transportation on November 5, 2024 and sell it today you would earn a total of 211.00 from holding Sichuan Fulin Transportation or generate 40.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Fulin Transportation vs. Shanghai Pudong Development
Performance |
| Timeline |
| Sichuan Fulin Transp |
| Shanghai Pudong Deve |
Sichuan Fulin and Shanghai Pudong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Fulin and Shanghai Pudong
The main advantage of trading using opposite Sichuan Fulin and Shanghai Pudong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Fulin position performs unexpectedly, Shanghai Pudong 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 Pudong will offset losses from the drop in Shanghai Pudong's long position.| Sichuan Fulin vs. Jinxiandai Information Industry | Sichuan Fulin vs. Lutian Machinery Co | Sichuan Fulin vs. Linzhou Heavy Machinery | Sichuan Fulin vs. Longmaster Information Tech |
| Shanghai Pudong vs. Iat Automobile Technology | Shanghai Pudong vs. Hangzhou Zhongya Machinery | Shanghai Pudong vs. Shenzhen Zhongzhuang Construction | Shanghai Pudong vs. Hongrun Construction Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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