Correlation Between Chengdu Kanghua and Shanghai
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By analyzing existing cross correlation between Chengdu Kanghua Biological and Shanghai MG Stationery, you can compare the effects of market volatilities on Chengdu Kanghua and Shanghai 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Kanghua and Shanghai.
Diversification Opportunities for Chengdu Kanghua and Shanghai
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chengdu and Shanghai is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Kanghua Biological and Shanghai MG Stationery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai MG Stationery 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai MG Stationery has no effect on the direction of Chengdu Kanghua i.e., Chengdu Kanghua and Shanghai go up and down completely randomly.
Pair Corralation between Chengdu Kanghua and Shanghai
Assuming the 90 days trading horizon Chengdu Kanghua Biological is expected to generate 1.44 times more return on investment than Shanghai. However, Chengdu Kanghua is 1.44 times more volatile than Shanghai MG Stationery. It trades about 0.0 of its potential returns per unit of risk. Shanghai MG Stationery is currently generating about -0.02 per unit of risk. If you would invest 6,994 in Chengdu Kanghua Biological on September 2, 2024 and sell it today you would lose (1,231) from holding Chengdu Kanghua Biological or give up 17.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Kanghua Biological vs. Shanghai MG Stationery
Performance |
| Timeline |
| Chengdu Kanghua Biol |
| Shanghai MG Stationery |
Chengdu Kanghua and Shanghai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Kanghua and Shanghai
The main advantage of trading using opposite Chengdu Kanghua and Shanghai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Kanghua position performs unexpectedly, Shanghai 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 will offset losses from the drop in Shanghai's long position.| Chengdu Kanghua vs. CITIC Guoan Information | Chengdu Kanghua vs. Juewei Food Co | Chengdu Kanghua vs. Zhengzhou Qianweiyangchu Food | Chengdu Kanghua vs. Lootom Telcovideo Network |
| Shanghai vs. Guangdong Shenglu Telecommunication | Shanghai vs. Shenzhen Kexin Communication | Shanghai vs. China Asset Management | Shanghai vs. China World Trade |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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