Correlation Between Shanghai Material and Montage Technology
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By analyzing existing cross correlation between Shanghai Material Trading and Montage Technology Co, you can compare the effects of market volatilities on Shanghai Material and Montage 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 Montage Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Material and Montage Technology.
Diversification Opportunities for Shanghai Material and Montage Technology
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shanghai and Montage is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Material Trading and Montage Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montage 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 Montage Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montage Technology has no effect on the direction of Shanghai Material i.e., Shanghai Material and Montage Technology go up and down completely randomly.
Pair Corralation between Shanghai Material and Montage Technology
Assuming the 90 days trading horizon Shanghai Material Trading is expected to under-perform the Montage Technology. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Material Trading is 1.32 times less risky than Montage Technology. The stock trades about -0.21 of its potential returns per unit of risk. The Montage Technology Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 6,790 in Montage Technology Co on November 1, 2024 and sell it today you would earn a total of 14.00 from holding Montage Technology Co or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Material Trading vs. Montage Technology Co
Performance |
| Timeline |
| Shanghai Material Trading |
| Montage Technology |
Shanghai Material and Montage Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Material and Montage Technology
The main advantage of trading using opposite Shanghai Material and Montage Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Material position performs unexpectedly, Montage 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 Montage Technology will offset losses from the drop in Montage Technology's long position.| Shanghai Material vs. Konfoong Materials International | Shanghai Material vs. Youngy Health Co | Shanghai Material vs. Yunnan Jianzhijia Health Chain | Shanghai Material vs. Suzhou Xingye Material |
| Montage Technology vs. Tieling Newcity Investment | Montage Technology vs. Aluminum Corp of | Montage Technology vs. Shanghai Material Trading | Montage Technology vs. Henan Shuanghui Investment |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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