Correlation Between Guangdong Advertising and Shanghai Electric
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By analyzing existing cross correlation between Guangdong Advertising Co and Shanghai Electric Group, you can compare the effects of market volatilities on Guangdong Advertising and Shanghai Electric 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 Guangdong Advertising with a short position of Shanghai Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Advertising and Shanghai Electric.
Diversification Opportunities for Guangdong Advertising and Shanghai Electric
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangdong and Shanghai is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Advertising Co and Shanghai Electric Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Electric and Guangdong Advertising 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 Guangdong Advertising Co are associated (or correlated) with Shanghai Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Electric has no effect on the direction of Guangdong Advertising i.e., Guangdong Advertising and Shanghai Electric go up and down completely randomly.
Pair Corralation between Guangdong Advertising and Shanghai Electric
Assuming the 90 days trading horizon Guangdong Advertising is expected to generate 1.41 times less return on investment than Shanghai Electric. But when comparing it to its historical volatility, Guangdong Advertising Co is 1.2 times less risky than Shanghai Electric. It trades about 0.24 of its potential returns per unit of risk. Shanghai Electric Group is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 365.00 in Shanghai Electric Group on September 2, 2024 and sell it today you would earn a total of 485.00 from holding Shanghai Electric Group or generate 132.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Advertising Co vs. Shanghai Electric Group
Performance |
| Timeline |
| Guangdong Advertising |
| Shanghai Electric |
Guangdong Advertising and Shanghai Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Advertising and Shanghai Electric
The main advantage of trading using opposite Guangdong Advertising and Shanghai Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Advertising position performs unexpectedly, Shanghai Electric 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 Electric will offset losses from the drop in Shanghai Electric's long position.| Guangdong Advertising vs. Chongqing Brewery Co | Guangdong Advertising vs. Hengkang Medical Group | Guangdong Advertising vs. Double Medical Technology | Guangdong Advertising vs. Shandong Publishing Media |
| Shanghai Electric vs. New China Life | Shanghai Electric vs. Ming Yang Smart | Shanghai Electric vs. 159681 | Shanghai Electric vs. 159005 |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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