Correlation Between China State and Shanghai CEO
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By analyzing existing cross correlation between China State Construction and Shanghai CEO Environmental, you can compare the effects of market volatilities on China State and Shanghai CEO 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 CEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Shanghai CEO.
Diversification Opportunities for China State and Shanghai CEO
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 CEO Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai CEO Environ 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 CEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai CEO Environ has no effect on the direction of China State i.e., China State and Shanghai CEO go up and down completely randomly.
Pair Corralation between China State and Shanghai CEO
Assuming the 90 days trading horizon China State is expected to generate 5.16 times less return on investment than Shanghai CEO. But when comparing it to its historical volatility, China State Construction is 1.2 times less risky than Shanghai CEO. It trades about 0.01 of its potential returns per unit of risk. Shanghai CEO Environmental is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 795.00 in Shanghai CEO Environmental on October 26, 2024 and sell it today you would earn a total of 49.00 from holding Shanghai CEO Environmental or generate 6.16% 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 CEO Environmental
Performance |
| Timeline |
| China State Construction |
| Shanghai CEO Environ |
China State and Shanghai CEO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Shanghai CEO
The main advantage of trading using opposite China State and Shanghai CEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Shanghai CEO 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 CEO will offset losses from the drop in Shanghai CEO's long position.| China State vs. Easyhome New Retail | China State vs. Jiangsu Broadcasting Cable | China State vs. Chahua Modern Housewares | China State vs. Gansu Huangtai Wine marketing |
| Shanghai CEO vs. China Petroleum Chemical | Shanghai CEO vs. PetroChina Co Ltd | Shanghai CEO vs. China State Construction | Shanghai CEO vs. China Railway Group |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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