Correlation Between Shanghai Material and Hengli Industrial
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By analyzing existing cross correlation between Shanghai Material Trading and Hengli Industrial Development, you can compare the effects of market volatilities on Shanghai Material and Hengli Industrial 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 Hengli Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Material and Hengli Industrial.
Diversification Opportunities for Shanghai Material and Hengli Industrial
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Hengli is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Material Trading and Hengli Industrial Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Industrial 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 Hengli Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengli Industrial has no effect on the direction of Shanghai Material i.e., Shanghai Material and Hengli Industrial go up and down completely randomly.
Pair Corralation between Shanghai Material and Hengli Industrial
Assuming the 90 days trading horizon Shanghai Material Trading is expected to generate 0.99 times more return on investment than Hengli Industrial. However, Shanghai Material Trading is 1.01 times less risky than Hengli Industrial. It trades about 0.02 of its potential returns per unit of risk. Hengli Industrial Development is currently generating about -0.02 per unit of risk. If you would invest 811.00 in Shanghai Material Trading on October 16, 2024 and sell it today you would earn a total of 110.00 from holding Shanghai Material Trading or generate 13.56% 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. Hengli Industrial Development
Performance |
| Timeline |
| Shanghai Material Trading |
| Hengli Industrial |
Shanghai Material and Hengli Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Material and Hengli Industrial
The main advantage of trading using opposite Shanghai Material and Hengli Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Material position performs unexpectedly, Hengli Industrial 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 Hengli Industrial will offset losses from the drop in Hengli Industrial's long position.| Shanghai Material vs. Jiajia Food Group | Shanghai Material vs. Yankershop Food Co | Shanghai Material vs. Eastroc Beverage Group | Shanghai Material vs. V V Food |
| Hengli Industrial vs. Shanghai Material Trading | Hengli Industrial vs. Jointo Energy Investment | Hengli Industrial vs. Beijing Mainstreets Investment | Hengli Industrial vs. Hubei Geoway 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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