Correlation Between 159681 and Shanghai Electric
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By analyzing existing cross correlation between 159681 and Shanghai Electric Group, you can compare the effects of market volatilities on 159681 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 159681 with a short position of Shanghai Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of 159681 and Shanghai Electric.
Diversification Opportunities for 159681 and Shanghai Electric
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 159681 and Shanghai is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding 159681 and Shanghai Electric Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Electric and 159681 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 159681 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 159681 i.e., 159681 and Shanghai Electric go up and down completely randomly.
Pair Corralation between 159681 and Shanghai Electric
Assuming the 90 days trading horizon 159681 is expected to generate 2.93 times less return on investment than Shanghai Electric. But when comparing it to its historical volatility, 159681 is 1.11 times less risky than Shanghai Electric. It trades about 0.07 of its potential returns per unit of risk. Shanghai Electric Group is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 391.00 in Shanghai Electric Group on September 3, 2024 and sell it today you would earn a total of 544.00 from holding Shanghai Electric Group or generate 139.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
159681 vs. Shanghai Electric Group
Performance |
| Timeline |
| 159681 |
| Shanghai Electric |
159681 and Shanghai Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 159681 and Shanghai Electric
The main advantage of trading using opposite 159681 and Shanghai Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 159681 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.The idea behind 159681 and Shanghai Electric Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Shanghai Electric vs. CITIC Guoan Information | Shanghai Electric vs. Hangzhou Gisway Information | Shanghai Electric vs. Huasi Agricultural Development | Shanghai Electric vs. AVCON Information Tech |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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