Correlation Between Southern PublishingMedia and Shanghai CEO
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By analyzing existing cross correlation between Southern PublishingMedia Co and Shanghai CEO Environmental, you can compare the effects of market volatilities on Southern PublishingMedia 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 Southern PublishingMedia with a short position of Shanghai CEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern PublishingMedia and Shanghai CEO.
Diversification Opportunities for Southern PublishingMedia and Shanghai CEO
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Southern and Shanghai is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Southern PublishingMedia Co 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 Southern PublishingMedia 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 Southern PublishingMedia Co 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 Southern PublishingMedia i.e., Southern PublishingMedia and Shanghai CEO go up and down completely randomly.
Pair Corralation between Southern PublishingMedia and Shanghai CEO
Assuming the 90 days trading horizon Southern PublishingMedia Co is expected to under-perform the Shanghai CEO. But the stock apears to be less risky and, when comparing its historical volatility, Southern PublishingMedia Co is 15.11 times less risky than Shanghai CEO. The stock trades about 0.0 of its potential returns per unit of risk. The Shanghai CEO Environmental is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,468 in Shanghai CEO Environmental on August 28, 2024 and sell it today you would lose (1,484) from holding Shanghai CEO Environmental or give up 60.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern PublishingMedia Co vs. Shanghai CEO Environmental
Performance |
| Timeline |
| Southern PublishingMedia |
| Shanghai CEO Environ |
Southern PublishingMedia and Shanghai CEO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern PublishingMedia and Shanghai CEO
The main advantage of trading using opposite Southern PublishingMedia and Shanghai CEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern PublishingMedia 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.The idea behind Southern PublishingMedia Co and Shanghai CEO Environmental pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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