Correlation Between Chailease Holding and Shanghai Commercial
Can any of the company-specific risk be diversified away by investing in both Chailease Holding and Shanghai Commercial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Chailease Holding and Shanghai Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chailease Holding Co and Shanghai Commercial Savings, you can compare the effects of market volatilities on Chailease Holding and Shanghai Commercial 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 Chailease Holding with a short position of Shanghai Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chailease Holding and Shanghai Commercial.
Diversification Opportunities for Chailease Holding and Shanghai Commercial
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chailease and Shanghai is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Chailease Holding Co and Shanghai Commercial Savings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Commercial and Chailease Holding 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 Chailease Holding Co are associated (or correlated) with Shanghai Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Commercial has no effect on the direction of Chailease Holding i.e., Chailease Holding and Shanghai Commercial go up and down completely randomly.
Pair Corralation between Chailease Holding and Shanghai Commercial
Assuming the 90 days trading horizon Chailease Holding Co is expected to under-perform the Shanghai Commercial. In addition to that, Chailease Holding is 1.64 times more volatile than Shanghai Commercial Savings. It trades about -0.11 of its total potential returns per unit of risk. Shanghai Commercial Savings is currently generating about -0.08 per unit of volatility. If you would invest 4,690 in Shanghai Commercial Savings on September 3, 2024 and sell it today you would lose (765.00) from holding Shanghai Commercial Savings or give up 16.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chailease Holding Co vs. Shanghai Commercial Savings
Performance |
| Timeline |
| Chailease Holding |
| Shanghai Commercial |
Chailease Holding and Shanghai Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chailease Holding and Shanghai Commercial
The main advantage of trading using opposite Chailease Holding and Shanghai Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chailease Holding position performs unexpectedly, Shanghai Commercial 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 Commercial will offset losses from the drop in Shanghai Commercial's long position.| Chailease Holding vs. Central Reinsurance Corp | Chailease Holding vs. Huaku Development Co | Chailease Holding vs. CTBC Financial Holding |
| Shanghai Commercial vs. Central Reinsurance Corp | Shanghai Commercial vs. Huaku Development Co | Shanghai Commercial vs. Chailease Holding Co | Shanghai Commercial vs. CTBC Financial Holding |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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