Correlation Between Shanghai Material and China Everbright
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By analyzing existing cross correlation between Shanghai Material Trading and China Everbright Bank, you can compare the effects of market volatilities on Shanghai Material and China Everbright 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 China Everbright. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Material and China Everbright.
Diversification Opportunities for Shanghai Material and China Everbright
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shanghai and China is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Material Trading and China Everbright Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Everbright Bank 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 China Everbright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Everbright Bank has no effect on the direction of Shanghai Material i.e., Shanghai Material and China Everbright go up and down completely randomly.
Pair Corralation between Shanghai Material and China Everbright
Assuming the 90 days trading horizon Shanghai Material Trading is expected to under-perform the China Everbright. In addition to that, Shanghai Material is 2.23 times more volatile than China Everbright Bank. It trades about -0.27 of its total potential returns per unit of risk. China Everbright Bank is currently generating about -0.05 per unit of volatility. If you would invest 377.00 in China Everbright Bank on October 19, 2024 and sell it today you would lose (6.00) from holding China Everbright Bank or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Material Trading vs. China Everbright Bank
Performance |
| Timeline |
| Shanghai Material Trading |
| China Everbright Bank |
Shanghai Material and China Everbright Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Material and China Everbright
The main advantage of trading using opposite Shanghai Material and China Everbright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Material position performs unexpectedly, China Everbright 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 China Everbright will offset losses from the drop in China Everbright's long position.| Shanghai Material vs. ROPEOK Technology Group | Shanghai Material vs. Smartgiant Technology Co | Shanghai Material vs. Changjiang Jinggong Steel | Shanghai Material vs. Guangdong Xiongsu Technology |
| China Everbright vs. Shanghai Material Trading | China Everbright vs. Anyang Iron Steel | China Everbright vs. Luyin Investment Group | China Everbright vs. Tongxing Environmental Protection |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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