Correlation Between Zhejiang Satellite and Shanghai Action
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By analyzing existing cross correlation between Zhejiang Satellite Petrochemical and Shanghai Action Education, you can compare the effects of market volatilities on Zhejiang Satellite and Shanghai Action 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 Zhejiang Satellite with a short position of Shanghai Action. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Satellite and Shanghai Action.
Diversification Opportunities for Zhejiang Satellite and Shanghai Action
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and Shanghai is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Satellite Petrochemic and Shanghai Action Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Action Education and Zhejiang Satellite 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 Zhejiang Satellite Petrochemical are associated (or correlated) with Shanghai Action. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Action Education has no effect on the direction of Zhejiang Satellite i.e., Zhejiang Satellite and Shanghai Action go up and down completely randomly.
Pair Corralation between Zhejiang Satellite and Shanghai Action
Assuming the 90 days trading horizon Zhejiang Satellite Petrochemical is expected to under-perform the Shanghai Action. But the stock apears to be less risky and, when comparing its historical volatility, Zhejiang Satellite Petrochemical is 2.49 times less risky than Shanghai Action. The stock trades about -0.13 of its potential returns per unit of risk. The Shanghai Action Education is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,508 in Shanghai Action Education on September 13, 2024 and sell it today you would earn a total of 142.00 from holding Shanghai Action Education or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Satellite Petrochemic vs. Shanghai Action Education
Performance |
| Timeline |
| Zhejiang Satellite |
| Shanghai Action Education |
Zhejiang Satellite and Shanghai Action Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Satellite and Shanghai Action
The main advantage of trading using opposite Zhejiang Satellite and Shanghai Action positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Satellite position performs unexpectedly, Shanghai Action 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 Action will offset losses from the drop in Shanghai Action's long position.| Zhejiang Satellite vs. Zijin Mining Group | Zhejiang Satellite vs. Wanhua Chemical Group | Zhejiang Satellite vs. Baoshan Iron Steel | Zhejiang Satellite vs. Shandong Gold Mining |
| Shanghai Action vs. Kingclean Electric Co | Shanghai Action vs. Daoming OpticsChemical Co | Shanghai Action vs. Lianhe Chemical Technology | Shanghai Action vs. Miracll Chemicals Co |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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