Correlation Between Shanghai Electric and Xiamen Goldenhome
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By analyzing existing cross correlation between Shanghai Electric Group and Xiamen Goldenhome Co, you can compare the effects of market volatilities on Shanghai Electric and Xiamen Goldenhome 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 Shanghai Electric with a short position of Xiamen Goldenhome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Electric and Xiamen Goldenhome.
Diversification Opportunities for Shanghai Electric and Xiamen Goldenhome
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Xiamen is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Electric Group and Xiamen Goldenhome Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Goldenhome and Shanghai Electric 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 Shanghai Electric Group are associated (or correlated) with Xiamen Goldenhome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Goldenhome has no effect on the direction of Shanghai Electric i.e., Shanghai Electric and Xiamen Goldenhome go up and down completely randomly.
Pair Corralation between Shanghai Electric and Xiamen Goldenhome
Assuming the 90 days trading horizon Shanghai Electric Group is expected to generate 0.95 times more return on investment than Xiamen Goldenhome. However, Shanghai Electric Group is 1.06 times less risky than Xiamen Goldenhome. It trades about 0.08 of its potential returns per unit of risk. Xiamen Goldenhome Co is currently generating about -0.01 per unit of risk. If you would invest 413.00 in Shanghai Electric Group on September 5, 2024 and sell it today you would earn a total of 562.00 from holding Shanghai Electric Group or generate 136.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Electric Group vs. Xiamen Goldenhome Co
Performance |
| Timeline |
| Shanghai Electric |
| Xiamen Goldenhome |
Shanghai Electric and Xiamen Goldenhome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Electric and Xiamen Goldenhome
The main advantage of trading using opposite Shanghai Electric and Xiamen Goldenhome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Electric position performs unexpectedly, Xiamen Goldenhome 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 Xiamen Goldenhome will offset losses from the drop in Xiamen Goldenhome's long position.| Shanghai Electric vs. Xiamen Goldenhome Co | Shanghai Electric vs. CITIC Metal Co | Shanghai Electric vs. Shandong Mining Machinery | Shanghai Electric vs. Ye Chiu Metal |
| Xiamen Goldenhome vs. Industrial and Commercial | Xiamen Goldenhome vs. Agricultural Bank of | Xiamen Goldenhome vs. China Construction Bank | Xiamen Goldenhome 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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