Correlation Between Shanghai Material and Changchun
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By analyzing existing cross correlation between Shanghai Material Trading and Changchun UP Optotech, you can compare the effects of market volatilities on Shanghai Material and Changchun 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 Changchun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Material and Changchun.
Diversification Opportunities for Shanghai Material and Changchun
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Changchun is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Material Trading and Changchun UP Optotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun UP Optotech 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 Changchun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun UP Optotech has no effect on the direction of Shanghai Material i.e., Shanghai Material and Changchun go up and down completely randomly.
Pair Corralation between Shanghai Material and Changchun
Assuming the 90 days trading horizon Shanghai Material Trading is expected to generate 1.77 times more return on investment than Changchun. However, Shanghai Material is 1.77 times more volatile than Changchun UP Optotech. It trades about -0.12 of its potential returns per unit of risk. Changchun UP Optotech is currently generating about -0.31 per unit of risk. If you would invest 1,085 in Shanghai Material Trading on October 11, 2024 and sell it today you would lose (131.00) from holding Shanghai Material Trading or give up 12.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Material Trading vs. Changchun UP Optotech
Performance |
| Timeline |
| Shanghai Material Trading |
| Changchun UP Optotech |
Shanghai Material and Changchun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Material and Changchun
The main advantage of trading using opposite Shanghai Material and Changchun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Material position performs unexpectedly, Changchun 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 Changchun will offset losses from the drop in Changchun's long position.| Shanghai Material vs. China Minmetals Rare | Shanghai Material vs. Xiandai Investment Co | Shanghai Material vs. Guangdong Jingyi Metal | Shanghai Material vs. Beijing Mainstreets Investment |
| Changchun vs. Sinofibers Technology Co | Changchun vs. Cultural Investment Holdings | Changchun vs. Shanghai Material Trading | Changchun vs. Dhc Software Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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