Correlation Between Guangdong Shenglu and Shanghai Phichem
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Shanghai Phichem Material, you can compare the effects of market volatilities on Guangdong Shenglu and Shanghai Phichem 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 Shenglu with a short position of Shanghai Phichem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Shanghai Phichem.
Diversification Opportunities for Guangdong Shenglu and Shanghai Phichem
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Shanghai is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic and Shanghai Phichem Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Phichem Material and Guangdong Shenglu 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 Shenglu Telecommunication are associated (or correlated) with Shanghai Phichem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Phichem Material has no effect on the direction of Guangdong Shenglu i.e., Guangdong Shenglu and Shanghai Phichem go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Shanghai Phichem
Assuming the 90 days trading horizon Guangdong Shenglu Telecommunication is expected to under-perform the Shanghai Phichem. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Shenglu Telecommunication is 1.18 times less risky than Shanghai Phichem. The stock trades about -0.03 of its potential returns per unit of risk. The Shanghai Phichem Material is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,787 in Shanghai Phichem Material on October 13, 2024 and sell it today you would lose (329.00) from holding Shanghai Phichem Material or give up 18.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Shanghai Phichem Material
Performance |
| Timeline |
| Guangdong Shenglu |
| Shanghai Phichem Material |
Guangdong Shenglu and Shanghai Phichem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Shenglu and Shanghai Phichem
The main advantage of trading using opposite Guangdong Shenglu and Shanghai Phichem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu position performs unexpectedly, Shanghai Phichem 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 Phichem will offset losses from the drop in Shanghai Phichem's long position.| Guangdong Shenglu vs. Wuhan Hvsen Biotechnology | Guangdong Shenglu vs. Jiaozuo Wanfang Aluminum | Guangdong Shenglu vs. Shandong Sanyuan Biotechnology | Guangdong Shenglu vs. Western Metal Materials |
| Shanghai Phichem vs. TianJin 712 Communication | Shanghai Phichem vs. Miracll Chemicals Co | Shanghai Phichem vs. Shenyang Chemical Industry | Shanghai Phichem vs. Guangdong Shenglu Telecommunication |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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