Correlation Between State Grid and Shanghai Broadband
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By analyzing existing cross correlation between State Grid InformationCommunication and Shanghai Broadband Technology, you can compare the effects of market volatilities on State Grid and Shanghai Broadband 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 State Grid with a short position of Shanghai Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Grid and Shanghai Broadband.
Diversification Opportunities for State Grid and Shanghai Broadband
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between State and Shanghai is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding State Grid InformationCommunic and Shanghai Broadband Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Broadband and State Grid 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 State Grid InformationCommunication are associated (or correlated) with Shanghai Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Broadband has no effect on the direction of State Grid i.e., State Grid and Shanghai Broadband go up and down completely randomly.
Pair Corralation between State Grid and Shanghai Broadband
Assuming the 90 days trading horizon State Grid InformationCommunication is expected to generate 0.57 times more return on investment than Shanghai Broadband. However, State Grid InformationCommunication is 1.75 times less risky than Shanghai Broadband. It trades about -0.23 of its potential returns per unit of risk. Shanghai Broadband Technology is currently generating about -0.14 per unit of risk. If you would invest 1,971 in State Grid InformationCommunication on October 28, 2024 and sell it today you would lose (156.00) from holding State Grid InformationCommunication or give up 7.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Grid InformationCommunic vs. Shanghai Broadband Technology
Performance |
| Timeline |
| State Grid Informati |
| Shanghai Broadband |
State Grid and Shanghai Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Grid and Shanghai Broadband
The main advantage of trading using opposite State Grid and Shanghai Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Grid position performs unexpectedly, Shanghai Broadband 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 Broadband will offset losses from the drop in Shanghai Broadband's long position.| State Grid vs. Industrial and Commercial | State Grid vs. Kweichow Moutai Co | State Grid vs. Agricultural Bank of | State Grid vs. China Mobile Limited |
| Shanghai Broadband vs. Zijin Mining Group | Shanghai Broadband vs. Wanhua Chemical Group | Shanghai Broadband vs. Baoshan Iron Steel | Shanghai Broadband vs. Shandong Gold Mining |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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