Correlation Between Shanghai Broadband and Lotus Health
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By analyzing existing cross correlation between Shanghai Broadband Technology and Lotus Health Group, you can compare the effects of market volatilities on Shanghai Broadband and Lotus Health 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 Lotus Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Broadband and Lotus Health.
Diversification Opportunities for Shanghai Broadband and Lotus Health
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shanghai and Lotus is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Broadband Technology and Lotus Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Health Group 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 Lotus Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Health Group has no effect on the direction of Shanghai Broadband i.e., Shanghai Broadband and Lotus Health go up and down completely randomly.
Pair Corralation between Shanghai Broadband and Lotus Health
Assuming the 90 days trading horizon Shanghai Broadband Technology is expected to generate 0.68 times more return on investment than Lotus Health. However, Shanghai Broadband Technology is 1.48 times less risky than Lotus Health. It trades about 0.04 of its potential returns per unit of risk. Lotus Health Group is currently generating about 0.01 per unit of risk. If you would invest 302.00 in Shanghai Broadband Technology on November 7, 2024 and sell it today you would earn a total of 4.00 from holding Shanghai Broadband Technology or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Broadband Technology vs. Lotus Health Group
Performance |
| Timeline |
| Shanghai Broadband |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lotus Health Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Shanghai Broadband and Lotus Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Broadband and Lotus Health
The main advantage of trading using opposite Shanghai Broadband and Lotus Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Broadband position performs unexpectedly, Lotus Health 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 Lotus Health will offset losses from the drop in Lotus Health's long position.The idea behind Shanghai Broadband Technology and Lotus Health Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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