Correlation Between Inner Mongolia and Shanghai Zhangjiang
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By analyzing existing cross correlation between Inner Mongolia Furui and Shanghai Zhangjiang Hi Tech, you can compare the effects of market volatilities on Inner Mongolia 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 Inner Mongolia with a short position of Shanghai Zhangjiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inner Mongolia and Shanghai Zhangjiang.
Diversification Opportunities for Inner Mongolia and Shanghai Zhangjiang
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Inner and Shanghai is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Inner Mongolia Furui 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 Inner Mongolia 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 Inner Mongolia Furui 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 Inner Mongolia i.e., Inner Mongolia and Shanghai Zhangjiang go up and down completely randomly.
Pair Corralation between Inner Mongolia and Shanghai Zhangjiang
Assuming the 90 days trading horizon Inner Mongolia Furui is expected to under-perform the Shanghai Zhangjiang. In addition to that, Inner Mongolia is 1.04 times more volatile than Shanghai Zhangjiang Hi Tech. It trades about -0.04 of its total potential returns per unit of risk. Shanghai Zhangjiang Hi Tech is currently generating about 0.09 per unit of volatility. If you would invest 1,997 in Shanghai Zhangjiang Hi Tech on August 29, 2024 and sell it today you would earn a total of 805.00 from holding Shanghai Zhangjiang Hi Tech or generate 40.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inner Mongolia Furui vs. Shanghai Zhangjiang Hi Tech
Performance |
| Timeline |
| Inner Mongolia Furui |
| Shanghai Zhangjiang |
Inner Mongolia and Shanghai Zhangjiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inner Mongolia and Shanghai Zhangjiang
The main advantage of trading using opposite Inner Mongolia and Shanghai Zhangjiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inner Mongolia 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.| Inner Mongolia vs. Industrial and Commercial | Inner Mongolia vs. Agricultural Bank of | Inner Mongolia vs. China Construction Bank | Inner Mongolia vs. Bank of China |
| Shanghai Zhangjiang vs. Industrial and Commercial | Shanghai Zhangjiang vs. China Construction Bank | Shanghai Zhangjiang vs. Bank of China | Shanghai Zhangjiang vs. Agricultural Bank of |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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