Correlation Between Shanghai Construction and Jiangsu Broadcasting
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By analyzing existing cross correlation between Shanghai Construction Group and Jiangsu Broadcasting Cable, you can compare the effects of market volatilities on Shanghai Construction and Jiangsu Broadcasting 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 Construction with a short position of Jiangsu Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Construction and Jiangsu Broadcasting.
Diversification Opportunities for Shanghai Construction and Jiangsu Broadcasting
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Jiangsu is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Construction Group and Jiangsu Broadcasting Cable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Broadcasting and Shanghai Construction 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 Construction Group are associated (or correlated) with Jiangsu Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Broadcasting has no effect on the direction of Shanghai Construction i.e., Shanghai Construction and Jiangsu Broadcasting go up and down completely randomly.
Pair Corralation between Shanghai Construction and Jiangsu Broadcasting
Assuming the 90 days trading horizon Shanghai Construction Group is expected to under-perform the Jiangsu Broadcasting. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Construction Group is 1.13 times less risky than Jiangsu Broadcasting. The stock trades about 0.0 of its potential returns per unit of risk. The Jiangsu Broadcasting Cable is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 332.00 in Jiangsu Broadcasting Cable on October 29, 2024 and sell it today you would lose (8.00) from holding Jiangsu Broadcasting Cable or give up 2.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Construction Group vs. Jiangsu Broadcasting Cable
Performance |
| Timeline |
| Shanghai Construction |
| Jiangsu Broadcasting |
Shanghai Construction and Jiangsu Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Construction and Jiangsu Broadcasting
The main advantage of trading using opposite Shanghai Construction and Jiangsu Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Construction position performs unexpectedly, Jiangsu Broadcasting 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 Jiangsu Broadcasting will offset losses from the drop in Jiangsu Broadcasting's long position.The idea behind Shanghai Construction Group and Jiangsu Broadcasting Cable pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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