Correlation Between Shanghai Broadband and Fujian Wanchen
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By analyzing existing cross correlation between Shanghai Broadband Technology and Fujian Wanchen Biotechnology, you can compare the effects of market volatilities on Shanghai Broadband and Fujian Wanchen 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 Fujian Wanchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Broadband and Fujian Wanchen.
Diversification Opportunities for Shanghai Broadband and Fujian Wanchen
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Fujian is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Broadband Technology and Fujian Wanchen Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Wanchen Biote 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 Fujian Wanchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Wanchen Biote has no effect on the direction of Shanghai Broadband i.e., Shanghai Broadband and Fujian Wanchen go up and down completely randomly.
Pair Corralation between Shanghai Broadband and Fujian Wanchen
Assuming the 90 days trading horizon Shanghai Broadband Technology is expected to under-perform the Fujian Wanchen. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Broadband Technology is 1.24 times less risky than Fujian Wanchen. The stock trades about -0.11 of its potential returns per unit of risk. The Fujian Wanchen Biotechnology is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 6,479 in Fujian Wanchen Biotechnology on October 16, 2024 and sell it today you would earn a total of 1,810 from holding Fujian Wanchen Biotechnology or generate 27.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Broadband Technology vs. Fujian Wanchen Biotechnology
Performance |
| Timeline |
| Shanghai Broadband |
| Fujian Wanchen Biote |
Shanghai Broadband and Fujian Wanchen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Broadband and Fujian Wanchen
The main advantage of trading using opposite Shanghai Broadband and Fujian Wanchen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Broadband position performs unexpectedly, Fujian Wanchen 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 Fujian Wanchen will offset losses from the drop in Fujian Wanchen's long position.| Shanghai Broadband vs. GRG Banking Equipment | Shanghai Broadband vs. Huayi Brothers Media | Shanghai Broadband vs. Ningbo Tech Bank Co | Shanghai Broadband vs. Peoples Insurance of |
| Fujian Wanchen vs. Fujian Longzhou Transportation | Fujian Wanchen vs. Shanghai Broadband Technology | Fujian Wanchen vs. Eastern Communications Co | Fujian Wanchen vs. Hainan Haiqi Transportation |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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