Correlation Between Shanghai Material and Beijing Jiaman
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By analyzing existing cross correlation between Shanghai Material Trading and Beijing Jiaman Dress, you can compare the effects of market volatilities on Shanghai Material and Beijing Jiaman 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 Jiaman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Material and Beijing Jiaman.
Diversification Opportunities for Shanghai Material and Beijing Jiaman
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Beijing is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Material Trading and Beijing Jiaman Dress in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Jiaman Dress 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 Jiaman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Jiaman Dress has no effect on the direction of Shanghai Material i.e., Shanghai Material and Beijing Jiaman go up and down completely randomly.
Pair Corralation between Shanghai Material and Beijing Jiaman
Assuming the 90 days trading horizon Shanghai Material is expected to generate 8.22 times less return on investment than Beijing Jiaman. But when comparing it to its historical volatility, Shanghai Material Trading is 1.16 times less risky than Beijing Jiaman. It trades about 0.01 of its potential returns per unit of risk. Beijing Jiaman Dress is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,969 in Beijing Jiaman Dress on November 6, 2024 and sell it today you would earn a total of 32.00 from holding Beijing Jiaman Dress or generate 1.63% 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 Jiaman Dress
Performance |
| Timeline |
| Shanghai Material Trading |
| Beijing Jiaman Dress |
Shanghai Material and Beijing Jiaman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Material and Beijing Jiaman
The main advantage of trading using opposite Shanghai Material and Beijing Jiaman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Material position performs unexpectedly, Beijing Jiaman 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 Jiaman will offset losses from the drop in Beijing Jiaman's long position.| Shanghai Material vs. Shaanxi Energy Investment | Shanghai Material vs. HeBei Jinniu Chemical | Shanghai Material vs. Shenzhen Centralcon Investment | Shanghai Material vs. Nantong JiangTian Chemical |
| Beijing Jiaman vs. Fiberhome Telecommunication Technologies | Beijing Jiaman vs. AUPU Home Style | Beijing Jiaman vs. Maxvision Technology Corp | Beijing Jiaman vs. Smartgiant Technology 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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