Correlation Between China Publishing and Shanghai Sanyou
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By analyzing existing cross correlation between China Publishing Media and Shanghai Sanyou Medical, you can compare the effects of market volatilities on China Publishing and Shanghai Sanyou 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 Publishing with a short position of Shanghai Sanyou. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Publishing and Shanghai Sanyou.
Diversification Opportunities for China Publishing and Shanghai Sanyou
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Shanghai is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding China Publishing Media and Shanghai Sanyou Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Sanyou Medical and China Publishing 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 Publishing Media are associated (or correlated) with Shanghai Sanyou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Sanyou Medical has no effect on the direction of China Publishing i.e., China Publishing and Shanghai Sanyou go up and down completely randomly.
Pair Corralation between China Publishing and Shanghai Sanyou
Assuming the 90 days trading horizon China Publishing Media is expected to under-perform the Shanghai Sanyou. But the stock apears to be less risky and, when comparing its historical volatility, China Publishing Media is 1.45 times less risky than Shanghai Sanyou. The stock trades about -0.29 of its potential returns per unit of risk. The Shanghai Sanyou Medical is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,929 in Shanghai Sanyou Medical on October 24, 2024 and sell it today you would earn a total of 93.00 from holding Shanghai Sanyou Medical or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Publishing Media vs. Shanghai Sanyou Medical
Performance |
| Timeline |
| China Publishing Media |
| Shanghai Sanyou Medical |
China Publishing and Shanghai Sanyou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Publishing and Shanghai Sanyou
The main advantage of trading using opposite China Publishing and Shanghai Sanyou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Publishing position performs unexpectedly, Shanghai Sanyou 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 Sanyou will offset losses from the drop in Shanghai Sanyou's long position.The idea behind China Publishing Media and Shanghai Sanyou Medical 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 Stocks Directory module to find actively traded stocks across global markets.
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