Correlation Between Shanghai Pudong and Bank of Communications
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By analyzing existing cross correlation between Shanghai Pudong Development and Bank of Communications, you can compare the effects of market volatilities on Shanghai Pudong and Bank of Communications 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 Bank of Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Pudong and Bank of Communications.
Diversification Opportunities for Shanghai Pudong and Bank of Communications
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shanghai and Bank is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Pudong Development and Bank of Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Communications 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 Bank of Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Communications has no effect on the direction of Shanghai Pudong i.e., Shanghai Pudong and Bank of Communications go up and down completely randomly.
Pair Corralation between Shanghai Pudong and Bank of Communications
Assuming the 90 days trading horizon Shanghai Pudong Development is expected to generate 0.94 times more return on investment than Bank of Communications. However, Shanghai Pudong Development is 1.07 times less risky than Bank of Communications. It trades about 0.14 of its potential returns per unit of risk. Bank of Communications is currently generating about 0.07 per unit of risk. If you would invest 671.00 in Shanghai Pudong Development on October 20, 2024 and sell it today you would earn a total of 356.00 from holding Shanghai Pudong Development or generate 53.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Pudong Development vs. Bank of Communications
Performance |
| Timeline |
| Shanghai Pudong Deve |
| Bank of Communications |
Shanghai Pudong and Bank of Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Pudong and Bank of Communications
The main advantage of trading using opposite Shanghai Pudong and Bank of Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Pudong position performs unexpectedly, Bank of Communications 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 Bank of Communications will offset losses from the drop in Bank of Communications' long position.| Shanghai Pudong vs. Changjiang Publishing Media | Shanghai Pudong vs. Guangdong Wens Foodstuff | Shanghai Pudong vs. Chengdu B ray Media | Shanghai Pudong vs. Great Sun Foods Co |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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