Correlation Between Shanghai Material and Maxvision Technology
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By analyzing existing cross correlation between Shanghai Material Trading and Maxvision Technology Corp, you can compare the effects of market volatilities on Shanghai Material and Maxvision 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 Maxvision Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Material and Maxvision Technology.
Diversification Opportunities for Shanghai Material and Maxvision Technology
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Maxvision is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Material Trading and Maxvision Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxvision Technology Corp 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 Maxvision Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maxvision Technology Corp has no effect on the direction of Shanghai Material i.e., Shanghai Material and Maxvision Technology go up and down completely randomly.
Pair Corralation between Shanghai Material and Maxvision Technology
Assuming the 90 days trading horizon Shanghai Material Trading is expected to generate 1.45 times more return on investment than Maxvision Technology. However, Shanghai Material is 1.45 times more volatile than Maxvision Technology Corp. It trades about 0.03 of its potential returns per unit of risk. Maxvision Technology Corp is currently generating about 0.01 per unit of risk. If you would invest 915.00 in Shanghai Material Trading on October 24, 2024 and sell it today you would earn a total of 26.00 from holding Shanghai Material Trading or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Material Trading vs. Maxvision Technology Corp
Performance |
| Timeline |
| Shanghai Material Trading |
| Maxvision Technology Corp |
Shanghai Material and Maxvision Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Material and Maxvision Technology
The main advantage of trading using opposite Shanghai Material and Maxvision Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Material position performs unexpectedly, Maxvision 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 Maxvision Technology will offset losses from the drop in Maxvision Technology's long position.The idea behind Shanghai Material Trading and Maxvision Technology Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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