Correlation Between Shanghai Zhangjiang and ChengDu Hi
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By analyzing existing cross correlation between Shanghai Zhangjiang Hi Tech and ChengDu Hi Tech Development, you can compare the effects of market volatilities on Shanghai Zhangjiang and ChengDu Hi 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 Zhangjiang with a short position of ChengDu Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Zhangjiang and ChengDu Hi.
Diversification Opportunities for Shanghai Zhangjiang and ChengDu Hi
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shanghai and ChengDu is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Zhangjiang Hi Tech 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 Shanghai Zhangjiang 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 Zhangjiang Hi Tech are associated (or correlated) with ChengDu Hi. 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 Shanghai Zhangjiang i.e., Shanghai Zhangjiang and ChengDu Hi go up and down completely randomly.
Pair Corralation between Shanghai Zhangjiang and ChengDu Hi
Assuming the 90 days trading horizon Shanghai Zhangjiang is expected to generate 1.69 times less return on investment than ChengDu Hi. But when comparing it to its historical volatility, Shanghai Zhangjiang Hi Tech is 1.18 times less risky than ChengDu Hi. It trades about 0.07 of its potential returns per unit of risk. ChengDu Hi Tech Development is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,276 in ChengDu Hi Tech Development on August 26, 2024 and sell it today you would earn a total of 4,566 from holding ChengDu Hi Tech Development or generate 357.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Zhangjiang Hi Tech vs. ChengDu Hi Tech Development
Performance |
| Timeline |
| Shanghai Zhangjiang |
| ChengDu Hi Tech |
Shanghai Zhangjiang and ChengDu Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Zhangjiang and ChengDu Hi
The main advantage of trading using opposite Shanghai Zhangjiang and ChengDu Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Zhangjiang position performs unexpectedly, ChengDu Hi 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 will offset losses from the drop in ChengDu Hi's long position.| Shanghai Zhangjiang vs. Industrial and Commercial | Shanghai Zhangjiang vs. China Construction Bank | Shanghai Zhangjiang vs. Bank of China | Shanghai Zhangjiang vs. Agricultural Bank of |
| ChengDu Hi vs. Industrial and Commercial | ChengDu Hi vs. China Construction Bank | ChengDu Hi vs. Bank of China | ChengDu Hi vs. Agricultural Bank of |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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