Correlation Between China Fortune and Shanghai Action
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By analyzing existing cross correlation between China Fortune Land and Shanghai Action Education, you can compare the effects of market volatilities on China Fortune 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 Fortune with a short position of Shanghai Action. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Fortune and Shanghai Action.
Diversification Opportunities for China Fortune and Shanghai Action
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Shanghai is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding China Fortune Land 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 Fortune 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 Fortune Land 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 Fortune i.e., China Fortune and Shanghai Action go up and down completely randomly.
Pair Corralation between China Fortune and Shanghai Action
Assuming the 90 days trading horizon China Fortune Land is expected to generate 1.5 times more return on investment than Shanghai Action. However, China Fortune is 1.5 times more volatile than Shanghai Action Education. It trades about 0.03 of its potential returns per unit of risk. Shanghai Action Education is currently generating about 0.02 per unit of risk. If you would invest 189.00 in China Fortune Land on January 25, 2025 and sell it today you would earn a total of 39.00 from holding China Fortune Land or generate 20.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Fortune Land vs. Shanghai Action Education
Performance |
| Timeline |
| China Fortune Land |
| Shanghai Action Education |
China Fortune and Shanghai Action Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Fortune and Shanghai Action
The main advantage of trading using opposite China Fortune and Shanghai Action positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Fortune 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 Fortune vs. Industrial and Commercial | China Fortune vs. Kweichow Moutai Co | China Fortune vs. Agricultural Bank of | China Fortune vs. China Mobile Limited |
| Shanghai Action vs. Ingenic Semiconductor | Shanghai Action vs. Jointo Energy Investment | Shanghai Action vs. Semiconductor Manufacturing Intl | Shanghai Action vs. Tieling Newcity 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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