Correlation Between Shanghai Commercial and Topco Scientific
Can any of the company-specific risk be diversified away by investing in both Shanghai Commercial and Topco Scientific 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 Topco Scientific 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 Topco Scientific Co, you can compare the effects of market volatilities on Shanghai Commercial and Topco Scientific 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 Topco Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Commercial and Topco Scientific.
Diversification Opportunities for Shanghai Commercial and Topco Scientific
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shanghai and Topco is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Commercial Savings and Topco Scientific Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Topco Scientific 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 Topco Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Topco Scientific has no effect on the direction of Shanghai Commercial i.e., Shanghai Commercial and Topco Scientific go up and down completely randomly.
Pair Corralation between Shanghai Commercial and Topco Scientific
Assuming the 90 days trading horizon Shanghai Commercial Savings is expected to generate 0.94 times more return on investment than Topco Scientific. However, Shanghai Commercial Savings is 1.06 times less risky than Topco Scientific. It trades about 0.06 of its potential returns per unit of risk. Topco Scientific Co is currently generating about 0.04 per unit of risk. If you would invest 4,025 in Shanghai Commercial Savings on November 28, 2024 and sell it today you would earn a total of 355.00 from holding Shanghai Commercial Savings or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Commercial Savings vs. Topco Scientific Co
Performance |
| Timeline |
| Shanghai Commercial |
| Topco Scientific |
Shanghai Commercial and Topco Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Commercial and Topco Scientific
The main advantage of trading using opposite Shanghai Commercial and Topco Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Commercial position performs unexpectedly, Topco Scientific 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 Topco Scientific will offset losses from the drop in Topco Scientific's long position.| Shanghai Commercial vs. Mega Financial Holding | Shanghai Commercial vs. Yuanta Financial Holdings | Shanghai Commercial vs. ESUN Financial Holding | Shanghai Commercial vs. Taiwan Cooperative Financial |
| Topco Scientific vs. Elan Microelectronics Corp | Topco Scientific vs. Unitech Electronics Co | Topco Scientific vs. San Fu Chemical | Topco Scientific vs. Mechema Chemicals Int |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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