Correlation Between Industrial and Shanghai Shuixing
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By analyzing existing cross correlation between Industrial and Commercial and Shanghai Shuixing Home, you can compare the effects of market volatilities on Industrial and Shanghai Shuixing 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 Industrial with a short position of Shanghai Shuixing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Shanghai Shuixing.
Diversification Opportunities for Industrial and Shanghai Shuixing
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Industrial and Shanghai is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and Shanghai Shuixing Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Shuixing Home and Industrial 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 Industrial and Commercial are associated (or correlated) with Shanghai Shuixing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Shuixing Home has no effect on the direction of Industrial i.e., Industrial and Shanghai Shuixing go up and down completely randomly.
Pair Corralation between Industrial and Shanghai Shuixing
Assuming the 90 days trading horizon Industrial is expected to generate 2.46 times less return on investment than Shanghai Shuixing. But when comparing it to its historical volatility, Industrial and Commercial is 3.79 times less risky than Shanghai Shuixing. It trades about 0.32 of its potential returns per unit of risk. Shanghai Shuixing Home is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,405 in Shanghai Shuixing Home on September 12, 2024 and sell it today you would earn a total of 212.00 from holding Shanghai Shuixing Home or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. Shanghai Shuixing Home
Performance |
| Timeline |
| Industrial and Commercial |
| Shanghai Shuixing Home |
Industrial and Shanghai Shuixing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and Shanghai Shuixing
The main advantage of trading using opposite Industrial and Shanghai Shuixing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, Shanghai Shuixing 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 Shanghai Shuixing will offset losses from the drop in Shanghai Shuixing's long position.| Industrial vs. Eastroc Beverage Group | Industrial vs. China Publishing Media | Industrial vs. Inly Media Co | Industrial vs. Beijing Sanyuan Foods |
| Shanghai Shuixing vs. Lutian Machinery Co | Shanghai Shuixing vs. PetroChina Co Ltd | Shanghai Shuixing vs. Bank of China | Shanghai Shuixing vs. Gansu Jiu Steel |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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