Correlation Between Shanghai Pudong and Zhongtai Securities
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By analyzing existing cross correlation between Shanghai Pudong Development and Zhongtai Securities Co, you can compare the effects of market volatilities on Shanghai Pudong and Zhongtai Securities 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 Zhongtai Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Pudong and Zhongtai Securities.
Diversification Opportunities for Shanghai Pudong and Zhongtai Securities
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Zhongtai is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Pudong Development and Zhongtai Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongtai Securities 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 Zhongtai Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongtai Securities has no effect on the direction of Shanghai Pudong i.e., Shanghai Pudong and Zhongtai Securities go up and down completely randomly.
Pair Corralation between Shanghai Pudong and Zhongtai Securities
Assuming the 90 days trading horizon Shanghai Pudong is expected to generate 1.79 times less return on investment than Zhongtai Securities. But when comparing it to its historical volatility, Shanghai Pudong Development is 1.59 times less risky than Zhongtai Securities. It trades about 0.11 of its potential returns per unit of risk. Zhongtai Securities Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 566.00 in Zhongtai Securities Co on September 2, 2024 and sell it today you would earn a total of 130.00 from holding Zhongtai Securities Co or generate 22.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Pudong Development vs. Zhongtai Securities Co
Performance |
| Timeline |
| Shanghai Pudong Deve |
| Zhongtai Securities |
Shanghai Pudong and Zhongtai Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Pudong and Zhongtai Securities
The main advantage of trading using opposite Shanghai Pudong and Zhongtai Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Pudong position performs unexpectedly, Zhongtai Securities 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 Zhongtai Securities will offset losses from the drop in Zhongtai Securities' long position.| Shanghai Pudong vs. Hainan Haiqi Transportation | Shanghai Pudong vs. Heilongjiang Transport Development | Shanghai Pudong vs. Broadex Technologies Co | Shanghai Pudong vs. Pengxin International Mining |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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