Correlation Between Chengdu Xinzhu and Shanghai Broadband
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By analyzing existing cross correlation between Chengdu Xinzhu RoadBridge and Shanghai Broadband Technology, you can compare the effects of market volatilities on Chengdu Xinzhu 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 Chengdu Xinzhu with a short position of Shanghai Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Xinzhu and Shanghai Broadband.
Diversification Opportunities for Chengdu Xinzhu and Shanghai Broadband
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chengdu and Shanghai is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Xinzhu RoadBridge and Shanghai Broadband Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Broadband and Chengdu Xinzhu 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 Chengdu Xinzhu RoadBridge 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 Chengdu Xinzhu i.e., Chengdu Xinzhu and Shanghai Broadband go up and down completely randomly.
Pair Corralation between Chengdu Xinzhu and Shanghai Broadband
Assuming the 90 days trading horizon Chengdu Xinzhu is expected to generate 1.41 times less return on investment than Shanghai Broadband. In addition to that, Chengdu Xinzhu is 1.06 times more volatile than Shanghai Broadband Technology. It trades about 0.01 of its total potential returns per unit of risk. Shanghai Broadband Technology is currently generating about 0.02 per unit of volatility. If you would invest 400.00 in Shanghai Broadband Technology on August 25, 2024 and sell it today you would earn a total of 20.00 from holding Shanghai Broadband Technology or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Xinzhu RoadBridge vs. Shanghai Broadband Technology
Performance |
| Timeline |
| Chengdu Xinzhu RoadBridge |
| Shanghai Broadband |
Chengdu Xinzhu and Shanghai Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Xinzhu and Shanghai Broadband
The main advantage of trading using opposite Chengdu Xinzhu and Shanghai Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Xinzhu 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.| Chengdu Xinzhu vs. China National Software | Chengdu Xinzhu vs. Liaoning Chengda Biotechnology | Chengdu Xinzhu vs. Fujian Rongji Software | Chengdu Xinzhu vs. Eastern Air Logistics |
| Shanghai Broadband vs. Jiangxi Hengda Hi Tech | Shanghai Broadband vs. Sichuan Jinshi Technology | Shanghai Broadband vs. China Publishing Media | Shanghai Broadband vs. Sportsoul Co Ltd |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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