Correlation Between Shanghai Material and Kuangda Technology
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By analyzing existing cross correlation between Shanghai Material Trading and Kuangda Technology Group, you can compare the effects of market volatilities on Shanghai Material and Kuangda Technology 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 Kuangda Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Material and Kuangda Technology.
Diversification Opportunities for Shanghai Material and Kuangda Technology
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Kuangda is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Material Trading and Kuangda Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuangda Technology 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 Kuangda Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuangda Technology has no effect on the direction of Shanghai Material i.e., Shanghai Material and Kuangda Technology go up and down completely randomly.
Pair Corralation between Shanghai Material and Kuangda Technology
Assuming the 90 days trading horizon Shanghai Material Trading is expected to under-perform the Kuangda Technology. In addition to that, Shanghai Material is 1.04 times more volatile than Kuangda Technology Group. It trades about -0.18 of its total potential returns per unit of risk. Kuangda Technology Group is currently generating about -0.04 per unit of volatility. If you would invest 529.00 in Kuangda Technology Group on October 30, 2024 and sell it today you would lose (39.00) from holding Kuangda Technology Group or give up 7.37% 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. Kuangda Technology Group
Performance |
| Timeline |
| Shanghai Material Trading |
| Kuangda Technology |
Shanghai Material and Kuangda Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Material and Kuangda Technology
The main advantage of trading using opposite Shanghai Material and Kuangda Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Material position performs unexpectedly, Kuangda Technology 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 Kuangda Technology will offset losses from the drop in Kuangda Technology's long position.| Shanghai Material vs. Jinling Hotel Corp | Shanghai Material vs. Ningxia Younglight Chemicals | Shanghai Material vs. Shandong Polymer Biochemicals | Shanghai Material vs. Guocheng Mining Co |
| Kuangda Technology vs. PetroChina Co Ltd | Kuangda Technology vs. China Mobile Limited | Kuangda Technology vs. CNOOC Limited | Kuangda Technology vs. Ping An Insurance |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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