Correlation Between Bank of Shanghai and Tibet Huayu
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By analyzing existing cross correlation between Bank of Shanghai and Tibet Huayu Mining, you can compare the effects of market volatilities on Bank of Shanghai and Tibet Huayu 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 Bank of Shanghai with a short position of Tibet Huayu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Shanghai and Tibet Huayu.
Diversification Opportunities for Bank of Shanghai and Tibet Huayu
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Tibet is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Shanghai and Tibet Huayu Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tibet Huayu Mining and Bank of Shanghai 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 Bank of Shanghai are associated (or correlated) with Tibet Huayu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tibet Huayu Mining has no effect on the direction of Bank of Shanghai i.e., Bank of Shanghai and Tibet Huayu go up and down completely randomly.
Pair Corralation between Bank of Shanghai and Tibet Huayu
Assuming the 90 days trading horizon Bank of Shanghai is expected to generate 1.64 times less return on investment than Tibet Huayu. But when comparing it to its historical volatility, Bank of Shanghai is 2.79 times less risky than Tibet Huayu. It trades about 0.08 of its potential returns per unit of risk. Tibet Huayu Mining is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 891.00 in Tibet Huayu Mining on September 5, 2024 and sell it today you would earn a total of 533.00 from holding Tibet Huayu Mining or generate 59.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Shanghai vs. Tibet Huayu Mining
Performance |
| Timeline |
| Bank of Shanghai |
| Tibet Huayu Mining |
Bank of Shanghai and Tibet Huayu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Shanghai and Tibet Huayu
The main advantage of trading using opposite Bank of Shanghai and Tibet Huayu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Shanghai position performs unexpectedly, Tibet Huayu 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 Tibet Huayu will offset losses from the drop in Tibet Huayu's long position.| Bank of Shanghai vs. Tibet Huayu Mining | Bank of Shanghai vs. Uroica Mining Safety | Bank of Shanghai vs. Zijin Mining Group | Bank of Shanghai vs. ZYF Lopsking Aluminum |
| Tibet Huayu vs. Zijin Mining Group | Tibet Huayu vs. Wanhua Chemical Group | Tibet Huayu vs. Baoshan Iron Steel | Tibet Huayu vs. Shandong Gold Mining |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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