Correlation Between Hangzhou Weiguang and Shanghai Zhangjiang
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By analyzing existing cross correlation between Hangzhou Weiguang Electronic and Shanghai Zhangjiang Hi Tech, you can compare the effects of market volatilities on Hangzhou Weiguang and Shanghai Zhangjiang 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 Hangzhou Weiguang with a short position of Shanghai Zhangjiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Weiguang and Shanghai Zhangjiang.
Diversification Opportunities for Hangzhou Weiguang and Shanghai Zhangjiang
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hangzhou and Shanghai is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Weiguang Electronic and Shanghai Zhangjiang Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Zhangjiang and Hangzhou Weiguang 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 Hangzhou Weiguang Electronic are associated (or correlated) with Shanghai Zhangjiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Zhangjiang has no effect on the direction of Hangzhou Weiguang i.e., Hangzhou Weiguang and Shanghai Zhangjiang go up and down completely randomly.
Pair Corralation between Hangzhou Weiguang and Shanghai Zhangjiang
Assuming the 90 days trading horizon Hangzhou Weiguang is expected to generate 1.58 times less return on investment than Shanghai Zhangjiang. But when comparing it to its historical volatility, Hangzhou Weiguang Electronic is 1.49 times less risky than Shanghai Zhangjiang. It trades about 0.2 of its potential returns per unit of risk. Shanghai Zhangjiang Hi Tech is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,687 in Shanghai Zhangjiang Hi Tech on September 2, 2024 and sell it today you would earn a total of 1,160 from holding Shanghai Zhangjiang Hi Tech or generate 68.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hangzhou Weiguang Electronic vs. Shanghai Zhangjiang Hi Tech
Performance |
| Timeline |
| Hangzhou Weiguang |
| Shanghai Zhangjiang |
Hangzhou Weiguang and Shanghai Zhangjiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hangzhou Weiguang and Shanghai Zhangjiang
The main advantage of trading using opposite Hangzhou Weiguang and Shanghai Zhangjiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Weiguang position performs unexpectedly, Shanghai Zhangjiang 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 Zhangjiang will offset losses from the drop in Shanghai Zhangjiang's long position.| Hangzhou Weiguang vs. Shaanxi Broadcast TV | Hangzhou Weiguang vs. Zhongshan Broad Ocean Motor | Hangzhou Weiguang vs. Shanghai Metersbonwe FashionAccessories | Hangzhou Weiguang vs. Yindu Kitchen Equipment |
| Shanghai Zhangjiang vs. Shanghai Yanpu Metal | Shanghai Zhangjiang vs. Guangdong Jingyi Metal | Shanghai Zhangjiang vs. Youyou Foods Co | Shanghai Zhangjiang vs. Suzhou Weizhixiang Food |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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