Correlation Between Shaanxi Beiyuan and Shanghai Metersbonwe
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By analyzing existing cross correlation between Shaanxi Beiyuan Chemical and Shanghai Metersbonwe FashionAccessories, you can compare the effects of market volatilities on Shaanxi Beiyuan and Shanghai Metersbonwe 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 Beiyuan with a short position of Shanghai Metersbonwe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Beiyuan and Shanghai Metersbonwe.
Diversification Opportunities for Shaanxi Beiyuan and Shanghai Metersbonwe
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shaanxi and Shanghai is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Beiyuan Chemical and Shanghai Metersbonwe FashionAc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Metersbonwe and Shaanxi Beiyuan 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 Beiyuan Chemical are associated (or correlated) with Shanghai Metersbonwe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Metersbonwe has no effect on the direction of Shaanxi Beiyuan i.e., Shaanxi Beiyuan and Shanghai Metersbonwe go up and down completely randomly.
Pair Corralation between Shaanxi Beiyuan and Shanghai Metersbonwe
Assuming the 90 days trading horizon Shaanxi Beiyuan is expected to generate 7.63 times less return on investment than Shanghai Metersbonwe. But when comparing it to its historical volatility, Shaanxi Beiyuan Chemical is 4.3 times less risky than Shanghai Metersbonwe. It trades about 0.15 of its potential returns per unit of risk. Shanghai Metersbonwe FashionAccessories is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 195.00 in Shanghai Metersbonwe FashionAccessories on September 13, 2024 and sell it today you would earn a total of 69.00 from holding Shanghai Metersbonwe FashionAccessories or generate 35.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Beiyuan Chemical vs. Shanghai Metersbonwe FashionAc
Performance |
| Timeline |
| Shaanxi Beiyuan Chemical |
| Shanghai Metersbonwe |
Shaanxi Beiyuan and Shanghai Metersbonwe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Beiyuan and Shanghai Metersbonwe
The main advantage of trading using opposite Shaanxi Beiyuan and Shanghai Metersbonwe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Beiyuan position performs unexpectedly, Shanghai Metersbonwe 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 Metersbonwe will offset losses from the drop in Shanghai Metersbonwe's long position.| Shaanxi Beiyuan vs. Great Sun Foods Co | Shaanxi Beiyuan vs. Kontour Medical Technology | Shaanxi Beiyuan vs. Eastroc Beverage Group | Shaanxi Beiyuan vs. Beijing Yanjing Brewery |
| Shanghai Metersbonwe vs. Industrial and Commercial | Shanghai Metersbonwe vs. Agricultural Bank of | Shanghai Metersbonwe vs. China Construction Bank | Shanghai Metersbonwe vs. Bank of China |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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