Correlation Between Shanghai Broadband and Hefei Metalforming
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By analyzing existing cross correlation between Shanghai Broadband Technology and Hefei Metalforming Mach, you can compare the effects of market volatilities on Shanghai Broadband and Hefei Metalforming 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 Hefei Metalforming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Broadband and Hefei Metalforming.
Diversification Opportunities for Shanghai Broadband and Hefei Metalforming
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Hefei is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Broadband Technology and Hefei Metalforming Mach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hefei Metalforming Mach 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 Hefei Metalforming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hefei Metalforming Mach has no effect on the direction of Shanghai Broadband i.e., Shanghai Broadband and Hefei Metalforming go up and down completely randomly.
Pair Corralation between Shanghai Broadband and Hefei Metalforming
Assuming the 90 days trading horizon Shanghai Broadband Technology is expected to under-perform the Hefei Metalforming. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Broadband Technology is 1.06 times less risky than Hefei Metalforming. The stock trades about -0.16 of its potential returns per unit of risk. The Hefei Metalforming Mach is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 780.00 in Hefei Metalforming Mach on October 17, 2024 and sell it today you would lose (69.00) from holding Hefei Metalforming Mach or give up 8.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Broadband Technology vs. Hefei Metalforming Mach
Performance |
| Timeline |
| Shanghai Broadband |
| Hefei Metalforming Mach |
Shanghai Broadband and Hefei Metalforming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Broadband and Hefei Metalforming
The main advantage of trading using opposite Shanghai Broadband and Hefei Metalforming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Broadband position performs unexpectedly, Hefei Metalforming 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 Hefei Metalforming will offset losses from the drop in Hefei Metalforming's long position.| Shanghai Broadband vs. Shanghai Action Education | Shanghai Broadband vs. Montage Technology Co | Shanghai Broadband vs. HUAQIN TECHNOLOGY LTD | Shanghai Broadband vs. Guangdong Qunxing Toys |
| Hefei Metalforming vs. Biwin Storage Technology | Hefei Metalforming vs. PetroChina Co Ltd | Hefei Metalforming vs. Industrial and Commercial | Hefei Metalforming vs. China Construction Bank |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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