Correlation Between Shanghai Broadband and Hubeiyichang Transportation
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By analyzing existing cross correlation between Shanghai Broadband Technology and Hubeiyichang Transportation Group, you can compare the effects of market volatilities on Shanghai Broadband and Hubeiyichang Transportation 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 Broadband with a short position of Hubeiyichang Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Broadband and Hubeiyichang Transportation.
Diversification Opportunities for Shanghai Broadband and Hubeiyichang Transportation
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Hubeiyichang is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Broadband Technology and Hubeiyichang Transportation Gr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubeiyichang Transportation and Shanghai Broadband 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 Broadband Technology are associated (or correlated) with Hubeiyichang Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubeiyichang Transportation has no effect on the direction of Shanghai Broadband i.e., Shanghai Broadband and Hubeiyichang Transportation go up and down completely randomly.
Pair Corralation between Shanghai Broadband and Hubeiyichang Transportation
Assuming the 90 days trading horizon Shanghai Broadband is expected to generate 4.3 times less return on investment than Hubeiyichang Transportation. In addition to that, Shanghai Broadband is 2.16 times more volatile than Hubeiyichang Transportation Group. It trades about 0.02 of its total potential returns per unit of risk. Hubeiyichang Transportation Group is currently generating about 0.16 per unit of volatility. If you would invest 532.00 in Hubeiyichang Transportation Group on September 13, 2024 and sell it today you would earn a total of 23.00 from holding Hubeiyichang Transportation Group or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shanghai Broadband Technology vs. Hubeiyichang Transportation Gr
Performance |
| Timeline |
| Shanghai Broadband |
| Hubeiyichang Transportation |
Shanghai Broadband and Hubeiyichang Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Broadband and Hubeiyichang Transportation
The main advantage of trading using opposite Shanghai Broadband and Hubeiyichang Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Broadband position performs unexpectedly, Hubeiyichang Transportation 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 Hubeiyichang Transportation will offset losses from the drop in Hubeiyichang Transportation's long position.| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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