Correlation Between Guangdong Wens and Shanghai Pudong
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By analyzing existing cross correlation between Guangdong Wens Foodstuff and Shanghai Pudong Development, you can compare the effects of market volatilities on Guangdong Wens and Shanghai Pudong 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 Guangdong Wens with a short position of Shanghai Pudong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Wens and Shanghai Pudong.
Diversification Opportunities for Guangdong Wens and Shanghai Pudong
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Shanghai is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Wens Foodstuff and Shanghai Pudong Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Pudong Deve and Guangdong Wens 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 Guangdong Wens Foodstuff are associated (or correlated) with Shanghai Pudong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Pudong Deve has no effect on the direction of Guangdong Wens i.e., Guangdong Wens and Shanghai Pudong go up and down completely randomly.
Pair Corralation between Guangdong Wens and Shanghai Pudong
Assuming the 90 days trading horizon Guangdong Wens Foodstuff is expected to under-perform the Shanghai Pudong. In addition to that, Guangdong Wens is 1.09 times more volatile than Shanghai Pudong Development. It trades about -0.16 of its total potential returns per unit of risk. Shanghai Pudong Development is currently generating about 0.07 per unit of volatility. If you would invest 963.00 in Shanghai Pudong Development on September 14, 2024 and sell it today you would earn a total of 19.00 from holding Shanghai Pudong Development or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Wens Foodstuff vs. Shanghai Pudong Development
Performance |
| Timeline |
| Guangdong Wens Foodstuff |
| Shanghai Pudong Deve |
Guangdong Wens and Shanghai Pudong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Wens and Shanghai Pudong
The main advantage of trading using opposite Guangdong Wens and Shanghai Pudong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Wens position performs unexpectedly, Shanghai Pudong 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 Pudong will offset losses from the drop in Shanghai Pudong's long position.| Guangdong Wens vs. Nanjing Putian Telecommunications | Guangdong Wens vs. Tianjin Realty Development | Guangdong Wens vs. Kangyue Technology Co | Guangdong Wens vs. Shenzhen Hifuture Electric |
| Shanghai Pudong vs. Qingdao Foods Co | Shanghai Pudong vs. Guangdong Wens Foodstuff | Shanghai Pudong vs. Beijing Sanyuan Foods | Shanghai Pudong vs. Gan Yuan Foods |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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