Correlation Between AVCON Information and Shanghai Electric
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By analyzing existing cross correlation between AVCON Information Tech and Shanghai Electric Group, you can compare the effects of market volatilities on AVCON Information 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 AVCON Information with a short position of Shanghai Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVCON Information and Shanghai Electric.
Diversification Opportunities for AVCON Information and Shanghai Electric
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AVCON and Shanghai is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding AVCON Information Tech and Shanghai Electric Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Electric and AVCON Information 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 AVCON Information Tech 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 AVCON Information i.e., AVCON Information and Shanghai Electric go up and down completely randomly.
Pair Corralation between AVCON Information and Shanghai Electric
Assuming the 90 days trading horizon AVCON Information is expected to generate 3.53 times less return on investment than Shanghai Electric. In addition to that, AVCON Information is 1.36 times more volatile than Shanghai Electric Group. It trades about 0.02 of its total potential returns per unit of risk. Shanghai Electric Group is currently generating about 0.12 per unit of volatility. If you would invest 426.00 in Shanghai Electric Group on September 4, 2024 and sell it today you would earn a total of 509.00 from holding Shanghai Electric Group or generate 119.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVCON Information Tech vs. Shanghai Electric Group
Performance |
| Timeline |
| AVCON Information Tech |
| Shanghai Electric |
AVCON Information and Shanghai Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVCON Information and Shanghai Electric
The main advantage of trading using opposite AVCON Information and Shanghai Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVCON Information 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.| AVCON Information vs. Wuhan Hvsen Biotechnology | AVCON Information vs. China National Software | AVCON Information vs. Ningxia Younglight Chemicals | AVCON Information vs. Inspur Software Co |
| Shanghai Electric vs. Chengdu Kanghua Biological | Shanghai Electric vs. Beijing Wantai Biological | Shanghai Electric vs. Suzhou Novoprotein Scientific | Shanghai Electric vs. Aluminum Corp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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