Correlation Between China State and Shanghai Rendu
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By analyzing existing cross correlation between China State Construction and Shanghai Rendu Biotechnology, you can compare the effects of market volatilities on China State and Shanghai Rendu 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 Rendu. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Shanghai Rendu.
Diversification Opportunities for China State and Shanghai Rendu
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Shanghai is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Shanghai Rendu Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Rendu Biote 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 Rendu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Rendu Biote has no effect on the direction of China State i.e., China State and Shanghai Rendu go up and down completely randomly.
Pair Corralation between China State and Shanghai Rendu
Assuming the 90 days trading horizon China State Construction is expected to under-perform the Shanghai Rendu. But the stock apears to be less risky and, when comparing its historical volatility, China State Construction is 2.65 times less risky than Shanghai Rendu. The stock trades about -0.03 of its potential returns per unit of risk. The Shanghai Rendu Biotechnology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,095 in Shanghai Rendu Biotechnology on September 12, 2024 and sell it today you would earn a total of 105.00 from holding Shanghai Rendu Biotechnology or generate 2.56% 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 Rendu Biotechnology
Performance |
| Timeline |
| China State Construction |
| Shanghai Rendu Biote |
China State and Shanghai Rendu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Shanghai Rendu
The main advantage of trading using opposite China State and Shanghai Rendu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Shanghai Rendu 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 Rendu will offset losses from the drop in Shanghai Rendu's long position.| China State vs. Xilinmen Furniture Co | China State vs. Nanjing OLO Home | China State vs. Iat Automobile Technology | China State vs. Fiberhome Telecommunication Technologies |
| Shanghai Rendu vs. Cultural Investment Holdings | Shanghai Rendu vs. Gome Telecom Equipment | Shanghai Rendu vs. Holitech Technology Co | Shanghai Rendu vs. Zotye Automobile Co |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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