Correlation Between Shaanxi Broadcast and ChengDu Hi-Tech
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By analyzing existing cross correlation between Shaanxi Broadcast TV and ChengDu Hi Tech Development, you can compare the effects of market volatilities on Shaanxi Broadcast and ChengDu Hi-Tech 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 Shaanxi Broadcast with a short position of ChengDu Hi-Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Broadcast and ChengDu Hi-Tech.
Diversification Opportunities for Shaanxi Broadcast and ChengDu Hi-Tech
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shaanxi and ChengDu is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Broadcast TV and ChengDu Hi Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChengDu Hi Tech and Shaanxi Broadcast 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 Shaanxi Broadcast TV are associated (or correlated) with ChengDu Hi-Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChengDu Hi Tech has no effect on the direction of Shaanxi Broadcast i.e., Shaanxi Broadcast and ChengDu Hi-Tech go up and down completely randomly.
Pair Corralation between Shaanxi Broadcast and ChengDu Hi-Tech
Assuming the 90 days trading horizon Shaanxi Broadcast TV is expected to under-perform the ChengDu Hi-Tech. But the stock apears to be less risky and, when comparing its historical volatility, Shaanxi Broadcast TV is 1.53 times less risky than ChengDu Hi-Tech. The stock trades about -0.06 of its potential returns per unit of risk. The ChengDu Hi Tech Development is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,461 in ChengDu Hi Tech Development on January 24, 2025 and sell it today you would earn a total of 3,124 from holding ChengDu Hi Tech Development or generate 213.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Broadcast TV vs. ChengDu Hi Tech Development
Performance |
| Timeline |
| Shaanxi Broadcast |
| ChengDu Hi Tech |
Shaanxi Broadcast and ChengDu Hi-Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Broadcast and ChengDu Hi-Tech
The main advantage of trading using opposite Shaanxi Broadcast and ChengDu Hi-Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Broadcast position performs unexpectedly, ChengDu Hi-Tech 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 ChengDu Hi-Tech will offset losses from the drop in ChengDu Hi-Tech's long position.| Shaanxi Broadcast vs. Chison Medical Technologies | Shaanxi Broadcast vs. Beijing Balance Medical | Shaanxi Broadcast vs. SonoScape Medical Corp | Shaanxi Broadcast vs. Guangzhou Zhujiang Brewery |
| ChengDu Hi-Tech vs. Industrial and Commercial | ChengDu Hi-Tech vs. Kweichow Moutai Co | ChengDu Hi-Tech vs. Agricultural Bank of | ChengDu Hi-Tech vs. China Mobile Limited |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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