Correlation Between Shanghai Pudong and China Citic
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By analyzing existing cross correlation between Shanghai Pudong Development and China Citic Bank, you can compare the effects of market volatilities on Shanghai Pudong and China Citic 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 China Citic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Pudong and China Citic.
Diversification Opportunities for Shanghai Pudong and China Citic
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and China is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Pudong Development and China Citic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Citic Bank 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 China Citic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Citic Bank has no effect on the direction of Shanghai Pudong i.e., Shanghai Pudong and China Citic go up and down completely randomly.
Pair Corralation between Shanghai Pudong and China Citic
Assuming the 90 days trading horizon Shanghai Pudong Development is expected to generate 0.68 times more return on investment than China Citic. However, Shanghai Pudong Development is 1.47 times less risky than China Citic. It trades about 0.12 of its potential returns per unit of risk. China Citic Bank is currently generating about 0.03 per unit of risk. If you would invest 680.00 in Shanghai Pudong Development on August 29, 2024 and sell it today you would earn a total of 251.00 from holding Shanghai Pudong Development or generate 36.91% 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. China Citic Bank
Performance |
| Timeline |
| Shanghai Pudong Deve |
| China Citic Bank |
Shanghai Pudong and China Citic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Pudong and China Citic
The main advantage of trading using opposite Shanghai Pudong and China Citic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Pudong position performs unexpectedly, China Citic 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 China Citic will offset losses from the drop in China Citic's long position.| Shanghai Pudong vs. Hang Xiao Steel | Shanghai Pudong vs. Gansu Jiu Steel | Shanghai Pudong vs. Tianjin Capital Environmental | Shanghai Pudong vs. Eit Environmental Development |
| China Citic vs. Air China Ltd | China Citic vs. Shanghai Yaoji Playing | China Citic vs. Vontron Technology Co | China Citic vs. Kingsignal Technology 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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