Correlation Between Shanghai Pudong and Huitong Construction
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By analyzing existing cross correlation between Shanghai Pudong Development and Huitong Construction Group, you can compare the effects of market volatilities on Shanghai Pudong and Huitong Construction 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 Huitong Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Pudong and Huitong Construction.
Diversification Opportunities for Shanghai Pudong and Huitong Construction
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Huitong is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Pudong Development and Huitong Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huitong Construction 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 Huitong Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huitong Construction has no effect on the direction of Shanghai Pudong i.e., Shanghai Pudong and Huitong Construction go up and down completely randomly.
Pair Corralation between Shanghai Pudong and Huitong Construction
Assuming the 90 days trading horizon Shanghai Pudong Development is expected to under-perform the Huitong Construction. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Pudong Development is 1.51 times less risky than Huitong Construction. The stock trades about -0.19 of its potential returns per unit of risk. The Huitong Construction Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 504.00 in Huitong Construction Group on August 25, 2024 and sell it today you would earn a total of 24.00 from holding Huitong Construction Group or generate 4.76% 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. Huitong Construction Group
Performance |
| Timeline |
| Shanghai Pudong Deve |
| Huitong Construction |
Shanghai Pudong and Huitong Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Pudong and Huitong Construction
The main advantage of trading using opposite Shanghai Pudong and Huitong Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Pudong position performs unexpectedly, Huitong Construction 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 Huitong Construction will offset losses from the drop in Huitong Construction's long position.| Shanghai Pudong vs. Fujian Longzhou Transportation | Shanghai Pudong vs. Tianshui Huatian Technology | Shanghai Pudong vs. Western Superconducting Tech | Shanghai Pudong vs. Saurer Intelligent Technology |
| Huitong Construction vs. Ming Yang Smart | Huitong Construction vs. 159681 | Huitong Construction vs. 159005 | Huitong Construction vs. Loctek Ergonomic Technology |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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