Correlation Between Shanghai Ziyan and Huadong Medicine
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By analyzing existing cross correlation between Shanghai Ziyan Foods and Huadong Medicine Co, you can compare the effects of market volatilities on Shanghai Ziyan and Huadong Medicine 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 Ziyan with a short position of Huadong Medicine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Ziyan and Huadong Medicine.
Diversification Opportunities for Shanghai Ziyan and Huadong Medicine
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Huadong is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Ziyan Foods and Huadong Medicine Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huadong Medicine and Shanghai Ziyan 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 Ziyan Foods are associated (or correlated) with Huadong Medicine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huadong Medicine has no effect on the direction of Shanghai Ziyan i.e., Shanghai Ziyan and Huadong Medicine go up and down completely randomly.
Pair Corralation between Shanghai Ziyan and Huadong Medicine
Assuming the 90 days trading horizon Shanghai Ziyan Foods is expected to generate 1.24 times more return on investment than Huadong Medicine. However, Shanghai Ziyan is 1.24 times more volatile than Huadong Medicine Co. It trades about -0.01 of its potential returns per unit of risk. Huadong Medicine Co is currently generating about -0.02 per unit of risk. If you would invest 1,970 in Shanghai Ziyan Foods on October 16, 2024 and sell it today you would lose (256.00) from holding Shanghai Ziyan Foods or give up 12.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Ziyan Foods vs. Huadong Medicine Co
Performance |
| Timeline |
| Shanghai Ziyan Foods |
| Huadong Medicine |
Shanghai Ziyan and Huadong Medicine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Ziyan and Huadong Medicine
The main advantage of trading using opposite Shanghai Ziyan and Huadong Medicine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Ziyan position performs unexpectedly, Huadong Medicine 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 Huadong Medicine will offset losses from the drop in Huadong Medicine's long position.| Shanghai Ziyan vs. Qiming Information Technology | Shanghai Ziyan vs. Sublime China Information | Shanghai Ziyan vs. Xizi Clean Energy | Shanghai Ziyan vs. Suzhou Xingye Material |
| Huadong Medicine vs. Jiahe Foods Industry | Huadong Medicine vs. V V Food | Huadong Medicine vs. Shanghai Ziyan Foods | Huadong Medicine vs. Heilongjiang Transport Development |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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