Correlation Between Shanghai Material and Beijing Mainstreets
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By analyzing existing cross correlation between Shanghai Material Trading and Beijing Mainstreets Investment, you can compare the effects of market volatilities on Shanghai Material and Beijing Mainstreets 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 Material with a short position of Beijing Mainstreets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Material and Beijing Mainstreets.
Diversification Opportunities for Shanghai Material and Beijing Mainstreets
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Beijing is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Material Trading and Beijing Mainstreets Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Mainstreets and Shanghai Material 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 Material Trading are associated (or correlated) with Beijing Mainstreets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Mainstreets has no effect on the direction of Shanghai Material i.e., Shanghai Material and Beijing Mainstreets go up and down completely randomly.
Pair Corralation between Shanghai Material and Beijing Mainstreets
Assuming the 90 days trading horizon Shanghai Material Trading is expected to generate 0.82 times more return on investment than Beijing Mainstreets. However, Shanghai Material Trading is 1.22 times less risky than Beijing Mainstreets. It trades about 0.03 of its potential returns per unit of risk. Beijing Mainstreets Investment is currently generating about -0.02 per unit of risk. If you would invest 811.00 in Shanghai Material Trading on October 12, 2024 and sell it today you would earn a total of 143.00 from holding Shanghai Material Trading or generate 17.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Material Trading vs. Beijing Mainstreets Investment
Performance |
| Timeline |
| Shanghai Material Trading |
| Beijing Mainstreets |
Shanghai Material and Beijing Mainstreets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Material and Beijing Mainstreets
The main advantage of trading using opposite Shanghai Material and Beijing Mainstreets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Material position performs unexpectedly, Beijing Mainstreets 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 Beijing Mainstreets will offset losses from the drop in Beijing Mainstreets' long position.| Shanghai Material vs. Ping An Insurance | Shanghai Material vs. Shenzhen Noposion Agrochemicals | Shanghai Material vs. Porton Fine Chemicals | Shanghai Material vs. Beijing Bewinner Communications |
| Beijing Mainstreets vs. Maoming Petro Chemical Shihua | Beijing Mainstreets vs. Dhc Software Co | Beijing Mainstreets vs. Sharetronic Data Technology | Beijing Mainstreets vs. HUAQIN TECHNOLOGY LTD |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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