Correlation Between Hubei Geoway and Shanghai Rongtai
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By analyzing existing cross correlation between Hubei Geoway Investment and Shanghai Rongtai Health, you can compare the effects of market volatilities on Hubei Geoway and Shanghai Rongtai 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 Hubei Geoway with a short position of Shanghai Rongtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Geoway and Shanghai Rongtai.
Diversification Opportunities for Hubei Geoway and Shanghai Rongtai
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hubei and Shanghai is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Geoway Investment and Shanghai Rongtai Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Rongtai Health and Hubei Geoway 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 Hubei Geoway Investment are associated (or correlated) with Shanghai Rongtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Rongtai Health has no effect on the direction of Hubei Geoway i.e., Hubei Geoway and Shanghai Rongtai go up and down completely randomly.
Pair Corralation between Hubei Geoway and Shanghai Rongtai
Assuming the 90 days trading horizon Hubei Geoway Investment is expected to under-perform the Shanghai Rongtai. In addition to that, Hubei Geoway is 1.62 times more volatile than Shanghai Rongtai Health. It trades about -0.14 of its total potential returns per unit of risk. Shanghai Rongtai Health is currently generating about -0.22 per unit of volatility. If you would invest 1,566 in Shanghai Rongtai Health on October 12, 2024 and sell it today you would lose (188.00) from holding Shanghai Rongtai Health or give up 12.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Geoway Investment vs. Shanghai Rongtai Health
Performance |
| Timeline |
| Hubei Geoway Investment |
| Shanghai Rongtai Health |
Hubei Geoway and Shanghai Rongtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Geoway and Shanghai Rongtai
The main advantage of trading using opposite Hubei Geoway and Shanghai Rongtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Geoway position performs unexpectedly, Shanghai Rongtai 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 Rongtai will offset losses from the drop in Shanghai Rongtai's long position.| Hubei Geoway vs. Jiangsu Broadcasting Cable | Hubei Geoway vs. Guangzhou Tinci Materials | Hubei Geoway vs. Hangzhou Gaoxin Rubber | Hubei Geoway vs. Anshan Senyuan Road |
| Shanghai Rongtai vs. Longmaster Information Tech | Shanghai Rongtai vs. Hubei Geoway Investment | Shanghai Rongtai vs. ButOne Information Corp | Shanghai Rongtai vs. Jinxiandai Information Industry |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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