Correlation Between Fujian Oriental and Shanghai Action
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By analyzing existing cross correlation between Fujian Oriental Silver and Shanghai Action Education, you can compare the effects of market volatilities on Fujian Oriental and Shanghai Action 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 Fujian Oriental with a short position of Shanghai Action. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Oriental and Shanghai Action.
Diversification Opportunities for Fujian Oriental and Shanghai Action
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fujian and Shanghai is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Oriental Silver and Shanghai Action Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Action Education and Fujian Oriental 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 Fujian Oriental Silver are associated (or correlated) with Shanghai Action. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Action Education has no effect on the direction of Fujian Oriental i.e., Fujian Oriental and Shanghai Action go up and down completely randomly.
Pair Corralation between Fujian Oriental and Shanghai Action
Assuming the 90 days trading horizon Fujian Oriental Silver is expected to under-perform the Shanghai Action. In addition to that, Fujian Oriental is 1.67 times more volatile than Shanghai Action Education. It trades about -0.23 of its total potential returns per unit of risk. Shanghai Action Education is currently generating about -0.23 per unit of volatility. If you would invest 3,601 in Shanghai Action Education on August 28, 2024 and sell it today you would lose (355.00) from holding Shanghai Action Education or give up 9.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Oriental Silver vs. Shanghai Action Education
Performance |
| Timeline |
| Fujian Oriental Silver |
| Shanghai Action Education |
Fujian Oriental and Shanghai Action Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Oriental and Shanghai Action
The main advantage of trading using opposite Fujian Oriental and Shanghai Action positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Oriental position performs unexpectedly, Shanghai Action 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 Shanghai Action will offset losses from the drop in Shanghai Action's long position.| Fujian Oriental vs. Industrial and Commercial | Fujian Oriental vs. Agricultural Bank of | Fujian Oriental vs. China Construction Bank | Fujian Oriental vs. Bank of China |
| Shanghai Action vs. Jiangsu Broadcasting Cable | Shanghai Action vs. Shaanxi Broadcast TV | Shanghai Action vs. Hubeiyichang Transportation Group | Shanghai Action vs. Shanghai Broadband Technology |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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