Correlation Between Shanghai Commercial and Chernan Metal
Can any of the company-specific risk be diversified away by investing in both Shanghai Commercial and Chernan Metal 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 Shanghai Commercial and Chernan Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shanghai Commercial Savings and Chernan Metal Industrial, you can compare the effects of market volatilities on Shanghai Commercial and Chernan Metal 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 Shanghai Commercial with a short position of Chernan Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Commercial and Chernan Metal.
Diversification Opportunities for Shanghai Commercial and Chernan Metal
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shanghai and Chernan is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Commercial Savings and Chernan Metal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chernan Metal Industrial and Shanghai Commercial 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 Shanghai Commercial Savings are associated (or correlated) with Chernan Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chernan Metal Industrial has no effect on the direction of Shanghai Commercial i.e., Shanghai Commercial and Chernan Metal go up and down completely randomly.
Pair Corralation between Shanghai Commercial and Chernan Metal
Assuming the 90 days trading horizon Shanghai Commercial Savings is expected to generate 0.63 times more return on investment than Chernan Metal. However, Shanghai Commercial Savings is 1.58 times less risky than Chernan Metal. It trades about 0.06 of its potential returns per unit of risk. Chernan Metal Industrial is currently generating about -0.08 per unit of risk. If you would invest 3,830 in Shanghai Commercial Savings on September 12, 2024 and sell it today you would earn a total of 180.00 from holding Shanghai Commercial Savings or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Commercial Savings vs. Chernan Metal Industrial
Performance |
| Timeline |
| Shanghai Commercial |
| Chernan Metal Industrial |
Shanghai Commercial and Chernan Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Commercial and Chernan Metal
The main advantage of trading using opposite Shanghai Commercial and Chernan Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Commercial position performs unexpectedly, Chernan Metal 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 Chernan Metal will offset losses from the drop in Chernan Metal's long position.| Shanghai Commercial vs. Central Reinsurance Corp | Shanghai Commercial vs. Huaku Development Co | Shanghai Commercial vs. Fubon Financial Holding | Shanghai Commercial vs. Chailease Holding Co |
| Chernan Metal vs. Catcher Technology Co | Chernan Metal vs. Solar Applied Materials | Chernan Metal vs. Evergreen Steel Corp | Chernan Metal vs. Shin Zu Shing |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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