Correlation Between Shanghai Pudong and Hainan Haiqi
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By analyzing existing cross correlation between Shanghai Pudong Development and Hainan Haiqi Transportation, you can compare the effects of market volatilities on Shanghai Pudong and Hainan Haiqi 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 Hainan Haiqi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Pudong and Hainan Haiqi.
Diversification Opportunities for Shanghai Pudong and Hainan Haiqi
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Hainan is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Pudong Development and Hainan Haiqi Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Haiqi Transpo 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 Hainan Haiqi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Haiqi Transpo has no effect on the direction of Shanghai Pudong i.e., Shanghai Pudong and Hainan Haiqi go up and down completely randomly.
Pair Corralation between Shanghai Pudong and Hainan Haiqi
Assuming the 90 days trading horizon Shanghai Pudong Development is expected to under-perform the Hainan Haiqi. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Pudong Development is 1.9 times less risky than Hainan Haiqi. The stock trades about -0.16 of its potential returns per unit of risk. The Hainan Haiqi Transportation is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,913 in Hainan Haiqi Transportation on August 30, 2024 and sell it today you would earn a total of 17.00 from holding Hainan Haiqi Transportation or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Pudong Development vs. Hainan Haiqi Transportation
Performance |
| Timeline |
| Shanghai Pudong Deve |
| Hainan Haiqi Transpo |
Shanghai Pudong and Hainan Haiqi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Pudong and Hainan Haiqi
The main advantage of trading using opposite Shanghai Pudong and Hainan Haiqi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Pudong position performs unexpectedly, Hainan Haiqi 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 Hainan Haiqi will offset losses from the drop in Hainan Haiqi'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 |
| Hainan Haiqi vs. PetroChina Co Ltd | Hainan Haiqi vs. China State Construction | Hainan Haiqi vs. China Mobile Limited | Hainan Haiqi 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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