Correlation Between Shanghai Jinfeng and Shaanxi Construction
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By analyzing existing cross correlation between Shanghai Jinfeng Wine and Shaanxi Construction Machinery, you can compare the effects of market volatilities on Shanghai Jinfeng and Shaanxi Construction 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 Shaanxi Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Jinfeng and Shaanxi Construction.
Diversification Opportunities for Shanghai Jinfeng and Shaanxi Construction
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Shaanxi is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Jinfeng Wine and Shaanxi Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Construction 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 Shaanxi Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Construction has no effect on the direction of Shanghai Jinfeng i.e., Shanghai Jinfeng and Shaanxi Construction go up and down completely randomly.
Pair Corralation between Shanghai Jinfeng and Shaanxi Construction
Assuming the 90 days trading horizon Shanghai Jinfeng Wine is expected to under-perform the Shaanxi Construction. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Jinfeng Wine is 1.09 times less risky than Shaanxi Construction. The stock trades about -0.21 of its potential returns per unit of risk. The Shaanxi Construction Machinery is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 390.00 in Shaanxi Construction Machinery on October 20, 2024 and sell it today you would lose (40.00) from holding Shaanxi Construction Machinery or give up 10.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Jinfeng Wine vs. Shaanxi Construction Machinery
Performance |
| Timeline |
| Shanghai Jinfeng Wine |
| Shaanxi Construction |
Shanghai Jinfeng and Shaanxi Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Jinfeng and Shaanxi Construction
The main advantage of trading using opposite Shanghai Jinfeng and Shaanxi Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Jinfeng position performs unexpectedly, Shaanxi Construction 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 Shaanxi Construction will offset losses from the drop in Shaanxi Construction's long position.| Shanghai Jinfeng vs. Jointo Energy Investment | Shanghai Jinfeng vs. Zhongrun Resources Investment | Shanghai Jinfeng vs. Guangdong Jingyi Metal | Shanghai Jinfeng vs. Vanfund Urban Investment |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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