Correlation Between Shanghai Jinfeng and Wuhan Xianglong
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By analyzing existing cross correlation between Shanghai Jinfeng Wine and Wuhan Xianglong Power, you can compare the effects of market volatilities on Shanghai Jinfeng and Wuhan Xianglong 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 Jinfeng with a short position of Wuhan Xianglong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Jinfeng and Wuhan Xianglong.
Diversification Opportunities for Shanghai Jinfeng and Wuhan Xianglong
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Wuhan is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Jinfeng Wine and Wuhan Xianglong Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Xianglong Power and Shanghai Jinfeng 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 Jinfeng Wine are associated (or correlated) with Wuhan Xianglong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Xianglong Power has no effect on the direction of Shanghai Jinfeng i.e., Shanghai Jinfeng and Wuhan Xianglong go up and down completely randomly.
Pair Corralation between Shanghai Jinfeng and Wuhan Xianglong
Assuming the 90 days trading horizon Shanghai Jinfeng Wine is expected to under-perform the Wuhan Xianglong. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Jinfeng Wine is 1.5 times less risky than Wuhan Xianglong. The stock trades about -0.02 of its potential returns per unit of risk. The Wuhan Xianglong Power is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 929.00 in Wuhan Xianglong Power on November 28, 2024 and sell it today you would earn a total of 61.00 from holding Wuhan Xianglong Power or generate 6.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Shanghai Jinfeng Wine vs. Wuhan Xianglong Power
Performance |
| Timeline |
| Shanghai Jinfeng Wine |
| Wuhan Xianglong Power |
Shanghai Jinfeng and Wuhan Xianglong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Jinfeng and Wuhan Xianglong
The main advantage of trading using opposite Shanghai Jinfeng and Wuhan Xianglong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Jinfeng position performs unexpectedly, Wuhan Xianglong 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 Wuhan Xianglong will offset losses from the drop in Wuhan Xianglong's long position.| Shanghai Jinfeng vs. Guilin Seamild Foods | Shanghai Jinfeng vs. Namchow Food Group | Shanghai Jinfeng vs. Gan Yuan Foods | Shanghai Jinfeng vs. Guangxi Wuzhou Communications |
| Wuhan Xianglong vs. Tieling Newcity Investment | Wuhan Xianglong vs. CICT Mobile Communication | Wuhan Xianglong vs. Shenzhen Zqgame | Wuhan Xianglong vs. Beijing Mainstreets 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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