Correlation Between 516220 and Shanghai Action
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By analyzing existing cross correlation between 516220 and Shanghai Action Education, you can compare the effects of market volatilities on 516220 and Shanghai Action 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 516220 with a short position of Shanghai Action. Check out your portfolio center. Please also check ongoing floating volatility patterns of 516220 and Shanghai Action.
Diversification Opportunities for 516220 and Shanghai Action
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 516220 and Shanghai is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding 516220 and Shanghai Action Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Action Education and 516220 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 516220 are associated (or correlated) with Shanghai Action. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Action Education has no effect on the direction of 516220 i.e., 516220 and Shanghai Action go up and down completely randomly.
Pair Corralation between 516220 and Shanghai Action
Assuming the 90 days trading horizon 516220 is expected to under-perform the Shanghai Action. But the etf apears to be less risky and, when comparing its historical volatility, 516220 is 2.08 times less risky than Shanghai Action. The etf trades about -0.13 of its potential returns per unit of risk. The Shanghai Action Education is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,555 in Shanghai Action Education on September 12, 2024 and sell it today you would earn a total of 72.00 from holding Shanghai Action Education or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
516220 vs. Shanghai Action Education
Performance |
| Timeline |
| 516220 |
| Shanghai Action Education |
516220 and Shanghai Action Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 516220 and Shanghai Action
The main advantage of trading using opposite 516220 and Shanghai Action positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 516220 position performs unexpectedly, Shanghai Action 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 Action will offset losses from the drop in Shanghai Action's long position.The idea behind 516220 and Shanghai Action Education pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Shanghai Action vs. Lutian Machinery Co | Shanghai Action vs. PetroChina Co Ltd | Shanghai Action vs. Bank of China | Shanghai Action vs. Gansu Jiu Steel |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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