Correlation Between China Everbright and Shanghai Pudong
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By analyzing existing cross correlation between China Everbright Bank and Shanghai Pudong Development, you can compare the effects of market volatilities on China Everbright and Shanghai Pudong 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 Everbright with a short position of Shanghai Pudong. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Everbright and Shanghai Pudong.
Diversification Opportunities for China Everbright and Shanghai Pudong
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Shanghai is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding China Everbright Bank and Shanghai Pudong Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Pudong Deve and China Everbright 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 Everbright Bank are associated (or correlated) with Shanghai Pudong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Pudong Deve has no effect on the direction of China Everbright i.e., China Everbright and Shanghai Pudong go up and down completely randomly.
Pair Corralation between China Everbright and Shanghai Pudong
Assuming the 90 days trading horizon China Everbright Bank is expected to generate 1.45 times more return on investment than Shanghai Pudong. However, China Everbright is 1.45 times more volatile than Shanghai Pudong Development. It trades about 0.03 of its potential returns per unit of risk. Shanghai Pudong Development is currently generating about 0.02 per unit of risk. If you would invest 383.00 in China Everbright Bank on October 26, 2024 and sell it today you would earn a total of 4.00 from holding China Everbright Bank or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
China Everbright Bank vs. Shanghai Pudong Development
Performance |
| Timeline |
| China Everbright Bank |
| Shanghai Pudong Deve |
China Everbright and Shanghai Pudong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Everbright and Shanghai Pudong
The main advantage of trading using opposite China Everbright and Shanghai Pudong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Everbright position performs unexpectedly, Shanghai Pudong 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 Pudong will offset losses from the drop in Shanghai Pudong's long position.| China Everbright vs. China Life Insurance | China Everbright vs. Cinda Securities Co | China Everbright vs. Piotech Inc A | China Everbright vs. Dongxing Sec Co |
| Shanghai Pudong vs. Sichuan Fulin Transportation | Shanghai Pudong vs. Sportsoul Co Ltd | Shanghai Pudong vs. Eastern Communications Co | Shanghai Pudong vs. Wuhan Yangtze Communication |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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