Correlation Between Sichuan Fulin and Shanghai Broadband
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By analyzing existing cross correlation between Sichuan Fulin Transportation and Shanghai Broadband Technology, you can compare the effects of market volatilities on Sichuan Fulin and Shanghai Broadband 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 Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Fulin and Shanghai Broadband.
Diversification Opportunities for Sichuan Fulin and Shanghai Broadband
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sichuan and Shanghai is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Fulin Transportation and Shanghai Broadband Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Broadband 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 Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Broadband has no effect on the direction of Sichuan Fulin i.e., Sichuan Fulin and Shanghai Broadband go up and down completely randomly.
Pair Corralation between Sichuan Fulin and Shanghai Broadband
Assuming the 90 days trading horizon Sichuan Fulin is expected to generate 2.7 times less return on investment than Shanghai Broadband. But when comparing it to its historical volatility, Sichuan Fulin Transportation is 1.04 times less risky than Shanghai Broadband. It trades about 0.18 of its potential returns per unit of risk. Shanghai Broadband Technology is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 328.00 in Shanghai Broadband Technology on August 27, 2024 and sell it today you would earn a total of 87.00 from holding Shanghai Broadband Technology or generate 26.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Fulin Transportation vs. Shanghai Broadband Technology
Performance |
| Timeline |
| Sichuan Fulin Transp |
| Shanghai Broadband |
Sichuan Fulin and Shanghai Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Fulin and Shanghai Broadband
The main advantage of trading using opposite Sichuan Fulin and Shanghai Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Fulin position performs unexpectedly, Shanghai Broadband 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 Broadband will offset losses from the drop in Shanghai Broadband's long position.| Sichuan Fulin vs. Cambricon Technologies Corp | Sichuan Fulin vs. Loongson Technology Corp | Sichuan Fulin vs. Chongqing Road Bridge | Sichuan Fulin vs. Shenzhen Fortune Trend |
| Shanghai Broadband vs. Zijin Mining Group | Shanghai Broadband vs. Wanhua Chemical Group | Shanghai Broadband vs. Baoshan Iron Steel | Shanghai Broadband 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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