Correlation Between Shanxi Lanhua and Shanghai Xinhua
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By analyzing existing cross correlation between Shanxi Lanhua Sci Tech and Shanghai Xinhua Media, you can compare the effects of market volatilities on Shanxi Lanhua and Shanghai Xinhua 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 Shanxi Lanhua with a short position of Shanghai Xinhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanxi Lanhua and Shanghai Xinhua.
Diversification Opportunities for Shanxi Lanhua and Shanghai Xinhua
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanxi and Shanghai is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Shanxi Lanhua Sci Tech and Shanghai Xinhua Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Xinhua Media and Shanxi Lanhua 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 Shanxi Lanhua Sci Tech are associated (or correlated) with Shanghai Xinhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Xinhua Media has no effect on the direction of Shanxi Lanhua i.e., Shanxi Lanhua and Shanghai Xinhua go up and down completely randomly.
Pair Corralation between Shanxi Lanhua and Shanghai Xinhua
Assuming the 90 days trading horizon Shanxi Lanhua is expected to generate 15.0 times less return on investment than Shanghai Xinhua. But when comparing it to its historical volatility, Shanxi Lanhua Sci Tech is 1.66 times less risky than Shanghai Xinhua. It trades about 0.02 of its potential returns per unit of risk. Shanghai Xinhua Media is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 373.00 in Shanghai Xinhua Media on September 2, 2024 and sell it today you would earn a total of 252.00 from holding Shanghai Xinhua Media or generate 67.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanxi Lanhua Sci Tech vs. Shanghai Xinhua Media
Performance |
| Timeline |
| Shanxi Lanhua Sci |
| Shanghai Xinhua Media |
Shanxi Lanhua and Shanghai Xinhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanxi Lanhua and Shanghai Xinhua
The main advantage of trading using opposite Shanxi Lanhua and Shanghai Xinhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanxi Lanhua position performs unexpectedly, Shanghai Xinhua 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 Xinhua will offset losses from the drop in Shanghai Xinhua's long position.| Shanxi Lanhua vs. Bloomage Biotechnology Corp | Shanxi Lanhua vs. Xinjiang Communications Construction | Shanxi Lanhua vs. Guangdong Advertising Co | Shanxi Lanhua vs. Changchun BCHT Biotechnology |
| Shanghai Xinhua vs. China Everbright Bank | Shanghai Xinhua vs. Lianhe Chemical Technology | Shanghai Xinhua vs. Xilong Chemical Co | Shanghai Xinhua vs. Nancal Energy Saving Tech |
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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