Correlation Between China State and Shanghai Jinfeng
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By analyzing existing cross correlation between China State Construction and Shanghai Jinfeng Wine, you can compare the effects of market volatilities on China State and Shanghai Jinfeng 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 China State with a short position of Shanghai Jinfeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Shanghai Jinfeng.
Diversification Opportunities for China State and Shanghai Jinfeng
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Shanghai is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Shanghai Jinfeng Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Jinfeng Wine and China State 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 China State Construction are associated (or correlated) with Shanghai Jinfeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Jinfeng Wine has no effect on the direction of China State i.e., China State and Shanghai Jinfeng go up and down completely randomly.
Pair Corralation between China State and Shanghai Jinfeng
Assuming the 90 days trading horizon China State Construction is expected to under-perform the Shanghai Jinfeng. But the stock apears to be less risky and, when comparing its historical volatility, China State Construction is 1.44 times less risky than Shanghai Jinfeng. The stock trades about -0.09 of its potential returns per unit of risk. The Shanghai Jinfeng Wine is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 566.00 in Shanghai Jinfeng Wine on August 27, 2024 and sell it today you would earn a total of 15.00 from holding Shanghai Jinfeng Wine or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. Shanghai Jinfeng Wine
Performance |
| Timeline |
| China State Construction |
| Shanghai Jinfeng Wine |
China State and Shanghai Jinfeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Shanghai Jinfeng
The main advantage of trading using opposite China State and Shanghai Jinfeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Shanghai Jinfeng 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 Jinfeng will offset losses from the drop in Shanghai Jinfeng's long position.| China State vs. Ming Yang Smart | China State vs. 159681 | China State vs. 159005 | China State vs. Loctek Ergonomic Technology |
| Shanghai Jinfeng vs. Anhui Huilong Agricultural | Shanghai Jinfeng vs. Luyin Investment Group | Shanghai Jinfeng vs. Weichai Heavy Machinery | Shanghai Jinfeng vs. Zhejiang Construction Investment |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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