Correlation Between China Everbright and Shanghai Xinhua
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By analyzing existing cross correlation between China Everbright Bank and Shanghai Xinhua Media, you can compare the effects of market volatilities on China Everbright and Shanghai Xinhua 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 Xinhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Everbright and Shanghai Xinhua.
Diversification Opportunities for China Everbright and Shanghai Xinhua
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Shanghai is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding China Everbright Bank and Shanghai Xinhua Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Xinhua Media 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 Xinhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Xinhua Media has no effect on the direction of China Everbright i.e., China Everbright and Shanghai Xinhua go up and down completely randomly.
Pair Corralation between China Everbright and Shanghai Xinhua
Assuming the 90 days trading horizon China Everbright is expected to generate 4.99 times less return on investment than Shanghai Xinhua. But when comparing it to its historical volatility, China Everbright Bank is 2.31 times less risky than Shanghai Xinhua. It trades about 0.07 of its potential returns per unit of risk. Shanghai Xinhua Media is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 390.00 in Shanghai Xinhua Media on September 3, 2024 and sell it today you would earn a total of 298.00 from holding Shanghai Xinhua Media or generate 76.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Everbright Bank vs. Shanghai Xinhua Media
Performance |
| Timeline |
| China Everbright Bank |
| Shanghai Xinhua Media |
China Everbright and Shanghai Xinhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Everbright and Shanghai Xinhua
The main advantage of trading using opposite China Everbright and Shanghai Xinhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Everbright position performs unexpectedly, Shanghai Xinhua 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 Xinhua will offset losses from the drop in Shanghai Xinhua's long position.| China Everbright vs. Sportsoul Co Ltd | China Everbright vs. Jiangsu Broadcasting Cable | China Everbright vs. Fujian Longzhou Transportation | China Everbright vs. Hunan TV Broadcast |
| Shanghai Xinhua vs. Anhui Transport Consulting | Shanghai Xinhua vs. Jiangxi Naipu Mining | Shanghai Xinhua vs. Shengda Mining Co | Shanghai Xinhua vs. Broadex Technologies 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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