Correlation Between Chengdu Kanghua and Shanghai Shuixing
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By analyzing existing cross correlation between Chengdu Kanghua Biological and Shanghai Shuixing Home, you can compare the effects of market volatilities on Chengdu Kanghua and Shanghai Shuixing 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 Chengdu Kanghua with a short position of Shanghai Shuixing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and Shanghai Shuixing.
Diversification Opportunities for Chengdu Kanghua and Shanghai Shuixing
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chengdu and Shanghai is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and Shanghai Shuixing Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Shuixing Home and Chengdu Kanghua 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 Chengdu Kanghua Biological are associated (or correlated) with Shanghai Shuixing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Shuixing Home has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and Shanghai Shuixing go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and Shanghai Shuixing
Assuming the 90 days trading horizon Chengdu Kanghua Biological is expected to generate 1.3 times more return on investment than Shanghai Shuixing. However, Chengdu Kanghua is 1.3 times more volatile than Shanghai Shuixing Home. It trades about 0.0 of its potential returns per unit of risk. Shanghai Shuixing Home is currently generating about -0.02 per unit of risk. If you would invest 6,407 in Chengdu Kanghua Biological on September 3, 2024 and sell it today you would lose (644.00) from holding Chengdu Kanghua Biological or give up 10.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Kanghua Biological vs. Shanghai Shuixing Home
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| Shanghai Shuixing Home |
Chengdu Kanghua and Shanghai Shuixing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and Shanghai Shuixing
The main advantage of trading using opposite Chengdu Kanghua and Shanghai Shuixing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, Shanghai Shuixing 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 Shuixing will offset losses from the drop in Shanghai Shuixing's long position.| Chengdu Kanghua vs. Chengdu Xinzhu RoadBridge | Chengdu Kanghua vs. China Life Insurance | Chengdu Kanghua vs. Shaanxi Broadcast TV | Chengdu Kanghua vs. Tianshan Aluminum Group |
| Shanghai Shuixing vs. Cofoe Medical Technology | Shanghai Shuixing vs. Qingdao Baheal Medical | Shanghai Shuixing vs. Jinling Hotel Corp | Shanghai Shuixing vs. Allmed Medical Products |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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