Correlation Between China World and Shanghai Action
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By analyzing existing cross correlation between China World Trade and Shanghai Action Education, you can compare the effects of market volatilities on China World and Shanghai Action 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 China World with a short position of Shanghai Action. Check out your portfolio center. Please also check ongoing floating volatility patterns of China World and Shanghai Action.
Diversification Opportunities for China World and Shanghai Action
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Shanghai is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding China World Trade and Shanghai Action Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Action Education and China World 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 China World Trade are associated (or correlated) with Shanghai Action. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Action Education has no effect on the direction of China World i.e., China World and Shanghai Action go up and down completely randomly.
Pair Corralation between China World and Shanghai Action
Assuming the 90 days trading horizon China World Trade is expected to generate 0.68 times more return on investment than Shanghai Action. However, China World Trade is 1.47 times less risky than Shanghai Action. It trades about 0.09 of its potential returns per unit of risk. Shanghai Action Education is currently generating about 0.03 per unit of risk. If you would invest 2,446 in China World Trade on November 1, 2024 and sell it today you would earn a total of 50.00 from holding China World Trade or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China World Trade vs. Shanghai Action Education
Performance |
| Timeline |
| China World Trade |
| Shanghai Action Education |
China World and Shanghai Action Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China World and Shanghai Action
The main advantage of trading using opposite China World and Shanghai Action positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China World position performs unexpectedly, Shanghai Action 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 Shanghai Action will offset losses from the drop in Shanghai Action's long position.| China World vs. New Hope Dairy | China World vs. Jiajia Food Group | China World vs. Hefei Metalforming Mach | China World vs. Guangdong Jingyi Metal |
| Shanghai Action vs. Gansu Huangtai Wine marketing | Shanghai Action vs. China World Trade | Shanghai Action vs. Guilin Seamild Foods | Shanghai Action vs. Shenzhen Clou Electronics |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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