Correlation Between Shanghai Broadband and Long Yuan
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By analyzing existing cross correlation between Shanghai Broadband Technology and Long Yuan Construction, you can compare the effects of market volatilities on Shanghai Broadband and Long Yuan 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 Long Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Broadband and Long Yuan.
Diversification Opportunities for Shanghai Broadband and Long Yuan
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Long is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Broadband Technology and Long Yuan Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long Yuan Construction 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 Long Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long Yuan Construction has no effect on the direction of Shanghai Broadband i.e., Shanghai Broadband and Long Yuan go up and down completely randomly.
Pair Corralation between Shanghai Broadband and Long Yuan
Assuming the 90 days trading horizon Shanghai Broadband is expected to generate 3.19 times less return on investment than Long Yuan. In addition to that, Shanghai Broadband is 1.25 times more volatile than Long Yuan Construction. It trades about 0.04 of its total potential returns per unit of risk. Long Yuan Construction is currently generating about 0.16 per unit of volatility. If you would invest 345.00 in Long Yuan Construction on November 5, 2024 and sell it today you would earn a total of 21.00 from holding Long Yuan Construction or generate 6.09% 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. Long Yuan Construction
Performance |
| Timeline |
| Shanghai Broadband |
| Long Yuan Construction |
Shanghai Broadband and Long Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Broadband and Long Yuan
The main advantage of trading using opposite Shanghai Broadband and Long Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Broadband position performs unexpectedly, Long Yuan 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 Long Yuan will offset losses from the drop in Long Yuan'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 |
| Long Yuan vs. Panda Financial Holding | Long Yuan vs. Dazhong Transportation Group | Long Yuan vs. HeNan Splendor Science | Long Yuan vs. Chongqing Road Bridge |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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