Correlation Between Shanghai Pudong and Guangzhou SiE
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By analyzing existing cross correlation between Shanghai Pudong Development and Guangzhou SiE Consulting, you can compare the effects of market volatilities on Shanghai Pudong and Guangzhou SiE 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 Guangzhou SiE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Pudong and Guangzhou SiE.
Diversification Opportunities for Shanghai Pudong and Guangzhou SiE
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shanghai and Guangzhou is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Pudong Development and Guangzhou SiE Consulting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou SiE Consulting 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 Guangzhou SiE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou SiE Consulting has no effect on the direction of Shanghai Pudong i.e., Shanghai Pudong and Guangzhou SiE go up and down completely randomly.
Pair Corralation between Shanghai Pudong and Guangzhou SiE
Assuming the 90 days trading horizon Shanghai Pudong is expected to generate 147.86 times less return on investment than Guangzhou SiE. But when comparing it to its historical volatility, Shanghai Pudong Development is 100.29 times less risky than Guangzhou SiE. It trades about 0.07 of its potential returns per unit of risk. Guangzhou SiE Consulting is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,438 in Guangzhou SiE Consulting on October 22, 2024 and sell it today you would lose (1,706) from holding Guangzhou SiE Consulting or give up 49.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.02% |
| Values | Daily Returns |
Shanghai Pudong Development vs. Guangzhou SiE Consulting
Performance |
| Timeline |
| Shanghai Pudong Deve |
| Guangzhou SiE Consulting |
Shanghai Pudong and Guangzhou SiE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Pudong and Guangzhou SiE
The main advantage of trading using opposite Shanghai Pudong and Guangzhou SiE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Pudong position performs unexpectedly, Guangzhou SiE 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 Guangzhou SiE will offset losses from the drop in Guangzhou SiE's long position.| Shanghai Pudong vs. Uroica Mining Safety | Shanghai Pudong vs. Zijin Mining Group | Shanghai Pudong vs. Tianjin Silvery Dragon | Shanghai Pudong vs. Cansino Biologics |
| Guangzhou SiE vs. BYD Co Ltd | Guangzhou SiE vs. China Mobile Limited | Guangzhou SiE vs. Agricultural Bank of | Guangzhou SiE vs. Industrial and Commercial |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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