Correlation Between Shandong Ruifeng and Shanghai Zhangjiang
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By analyzing existing cross correlation between Shandong Ruifeng Chemical and Shanghai Zhangjiang Hi Tech, you can compare the effects of market volatilities on Shandong Ruifeng 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 Shandong Ruifeng with a short position of Shanghai Zhangjiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Ruifeng and Shanghai Zhangjiang.
Diversification Opportunities for Shandong Ruifeng and Shanghai Zhangjiang
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shandong and Shanghai is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Ruifeng Chemical 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 Shandong Ruifeng 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 Shandong Ruifeng Chemical 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 Shandong Ruifeng i.e., Shandong Ruifeng and Shanghai Zhangjiang go up and down completely randomly.
Pair Corralation between Shandong Ruifeng and Shanghai Zhangjiang
Assuming the 90 days trading horizon Shandong Ruifeng Chemical is expected to generate 1.13 times more return on investment than Shanghai Zhangjiang. However, Shandong Ruifeng is 1.13 times more volatile than Shanghai Zhangjiang Hi Tech. It trades about 0.14 of its potential returns per unit of risk. Shanghai Zhangjiang Hi Tech is currently generating about 0.07 per unit of risk. If you would invest 991.00 in Shandong Ruifeng Chemical on August 29, 2024 and sell it today you would earn a total of 148.00 from holding Shandong Ruifeng Chemical or generate 14.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Ruifeng Chemical vs. Shanghai Zhangjiang Hi Tech
Performance |
| Timeline |
| Shandong Ruifeng Chemical |
| Shanghai Zhangjiang |
Shandong Ruifeng and Shanghai Zhangjiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Ruifeng and Shanghai Zhangjiang
The main advantage of trading using opposite Shandong Ruifeng and Shanghai Zhangjiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Ruifeng 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.| Shandong Ruifeng vs. Bloomage Biotechnology Corp | Shandong Ruifeng vs. Unigroup Guoxin Microelectronics | Shandong Ruifeng vs. Epoxy Base Electronic | Shandong Ruifeng vs. Techshine Electronics Co |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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