Correlation Between Shanghai Pudong and Xiangtan Electrochemical
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By analyzing existing cross correlation between Shanghai Pudong Development and Xiangtan Electrochemical Scientific, you can compare the effects of market volatilities on Shanghai Pudong and Xiangtan Electrochemical 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 Pudong with a short position of Xiangtan Electrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Pudong and Xiangtan Electrochemical.
Diversification Opportunities for Shanghai Pudong and Xiangtan Electrochemical
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shanghai and Xiangtan is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Pudong Development and Xiangtan Electrochemical Scien in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangtan Electrochemical and Shanghai Pudong 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 Pudong Development are associated (or correlated) with Xiangtan Electrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangtan Electrochemical has no effect on the direction of Shanghai Pudong i.e., Shanghai Pudong and Xiangtan Electrochemical go up and down completely randomly.
Pair Corralation between Shanghai Pudong and Xiangtan Electrochemical
Assuming the 90 days trading horizon Shanghai Pudong Development is expected to under-perform the Xiangtan Electrochemical. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Pudong Development is 1.84 times less risky than Xiangtan Electrochemical. The stock trades about -0.3 of its potential returns per unit of risk. The Xiangtan Electrochemical Scientific is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,008 in Xiangtan Electrochemical Scientific on November 28, 2024 and sell it today you would earn a total of 52.00 from holding Xiangtan Electrochemical Scientific or generate 5.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Pudong Development vs. Xiangtan Electrochemical Scien
Performance |
| Timeline |
| Shanghai Pudong Deve |
| Xiangtan Electrochemical |
Shanghai Pudong and Xiangtan Electrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Pudong and Xiangtan Electrochemical
The main advantage of trading using opposite Shanghai Pudong and Xiangtan Electrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Pudong position performs unexpectedly, Xiangtan Electrochemical 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 Xiangtan Electrochemical will offset losses from the drop in Xiangtan Electrochemical's long position.| Shanghai Pudong vs. Gem Year Industrial Co | Shanghai Pudong vs. Pengxin International Mining | Shanghai Pudong vs. Zhengzhou Coal Mining | Shanghai Pudong vs. Harson Trading China |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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