Correlation Between Shanghai Commercial and Tainet Communication
Can any of the company-specific risk be diversified away by investing in both Shanghai Commercial and Tainet Communication 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 Tainet Communication 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 Tainet Communication System, you can compare the effects of market volatilities on Shanghai Commercial and Tainet Communication 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 Tainet Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Commercial and Tainet Communication.
Diversification Opportunities for Shanghai Commercial and Tainet Communication
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shanghai and Tainet is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Commercial Savings and Tainet Communication System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainet Communication 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 Tainet Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainet Communication has no effect on the direction of Shanghai Commercial i.e., Shanghai Commercial and Tainet Communication go up and down completely randomly.
Pair Corralation between Shanghai Commercial and Tainet Communication
Assuming the 90 days trading horizon Shanghai Commercial Savings is expected to generate 0.54 times more return on investment than Tainet Communication. However, Shanghai Commercial Savings is 1.85 times less risky than Tainet Communication. It trades about -0.1 of its potential returns per unit of risk. Tainet Communication System is currently generating about -0.06 per unit of risk. If you would invest 4,605 in Shanghai Commercial Savings on August 29, 2024 and sell it today you would lose (745.00) from holding Shanghai Commercial Savings or give up 16.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Commercial Savings vs. Tainet Communication System
Performance |
| Timeline |
| Shanghai Commercial |
| Tainet Communication |
Shanghai Commercial and Tainet Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Commercial and Tainet Communication
The main advantage of trading using opposite Shanghai Commercial and Tainet Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Commercial position performs unexpectedly, Tainet Communication 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 Tainet Communication will offset losses from the drop in Tainet Communication's long position.| Shanghai Commercial vs. Taiwan Secom Co | Shanghai Commercial vs. TTET Union Corp | Shanghai Commercial vs. China Steel Chemical | Shanghai Commercial vs. Taiwan Shin Kong |
| Tainet Communication vs. Accton Technology Corp | Tainet Communication vs. Wistron NeWeb Corp | Tainet Communication vs. Arcadyan Technology Corp | Tainet Communication vs. Sercomm Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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