Correlation Between Tibet Summit and Shanghai Ziyan
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By analyzing existing cross correlation between Tibet Summit Resources and Shanghai Ziyan Foods, you can compare the effects of market volatilities on Tibet Summit and Shanghai Ziyan 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 Tibet Summit with a short position of Shanghai Ziyan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tibet Summit and Shanghai Ziyan.
Diversification Opportunities for Tibet Summit and Shanghai Ziyan
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tibet and Shanghai is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Tibet Summit Resources and Shanghai Ziyan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Ziyan Foods and Tibet Summit 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 Tibet Summit Resources are associated (or correlated) with Shanghai Ziyan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Ziyan Foods has no effect on the direction of Tibet Summit i.e., Tibet Summit and Shanghai Ziyan go up and down completely randomly.
Pair Corralation between Tibet Summit and Shanghai Ziyan
Assuming the 90 days trading horizon Tibet Summit Resources is expected to generate 1.05 times more return on investment than Shanghai Ziyan. However, Tibet Summit is 1.05 times more volatile than Shanghai Ziyan Foods. It trades about 0.16 of its potential returns per unit of risk. Shanghai Ziyan Foods is currently generating about 0.12 per unit of risk. If you would invest 914.00 in Tibet Summit Resources on September 3, 2024 and sell it today you would earn a total of 262.00 from holding Tibet Summit Resources or generate 28.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tibet Summit Resources vs. Shanghai Ziyan Foods
Performance |
| Timeline |
| Tibet Summit Resources |
| Shanghai Ziyan Foods |
Tibet Summit and Shanghai Ziyan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tibet Summit and Shanghai Ziyan
The main advantage of trading using opposite Tibet Summit and Shanghai Ziyan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tibet Summit position performs unexpectedly, Shanghai Ziyan 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 Ziyan will offset losses from the drop in Shanghai Ziyan's long position.| Tibet Summit vs. Shanghai Ziyan Foods | Tibet Summit vs. Xiangyu Medical Co | Tibet Summit vs. Great Sun Foods Co | Tibet Summit vs. Shantou Wanshun Package |
| Shanghai Ziyan vs. PetroChina Co Ltd | Shanghai Ziyan vs. China Mobile Limited | Shanghai Ziyan vs. Industrial and Commercial | Shanghai Ziyan vs. China Life Insurance |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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