Correlation Between ISoftStone Information and Shanghai Bailian
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By analyzing existing cross correlation between iSoftStone Information Technology and Shanghai Bailian Group, you can compare the effects of market volatilities on ISoftStone Information and Shanghai Bailian 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 ISoftStone Information with a short position of Shanghai Bailian. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISoftStone Information and Shanghai Bailian.
Diversification Opportunities for ISoftStone Information and Shanghai Bailian
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ISoftStone and Shanghai is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding iSoftStone Information Technol and Shanghai Bailian Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Bailian and ISoftStone 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 iSoftStone Information Technology are associated (or correlated) with Shanghai Bailian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Bailian has no effect on the direction of ISoftStone Information i.e., ISoftStone Information and Shanghai Bailian go up and down completely randomly.
Pair Corralation between ISoftStone Information and Shanghai Bailian
Assuming the 90 days trading horizon iSoftStone Information Technology is expected to generate 2.39 times more return on investment than Shanghai Bailian. However, ISoftStone Information is 2.39 times more volatile than Shanghai Bailian Group. It trades about 0.1 of its potential returns per unit of risk. Shanghai Bailian Group is currently generating about 0.23 per unit of risk. If you would invest 5,152 in iSoftStone Information Technology on August 30, 2024 and sell it today you would earn a total of 1,127 from holding iSoftStone Information Technology or generate 21.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iSoftStone Information Technol vs. Shanghai Bailian Group
Performance |
| Timeline |
| iSoftStone Information |
| Shanghai Bailian |
ISoftStone Information and Shanghai Bailian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ISoftStone Information and Shanghai Bailian
The main advantage of trading using opposite ISoftStone Information and Shanghai Bailian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISoftStone Information position performs unexpectedly, Shanghai Bailian 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 Bailian will offset losses from the drop in Shanghai Bailian's long position.| ISoftStone Information vs. Agricultural Bank of | ISoftStone Information vs. Industrial and Commercial | ISoftStone Information vs. Bank of China | ISoftStone Information vs. PetroChina Co Ltd |
| Shanghai Bailian vs. Jinhe Biotechnology Co | Shanghai Bailian vs. Changchun BCHT Biotechnology | Shanghai Bailian vs. Bomesc Offshore Engineering | Shanghai Bailian vs. Healthcare Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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