Correlation Between Shanghai Ziyan and Sichuan Fulin
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By analyzing existing cross correlation between Shanghai Ziyan Foods and Sichuan Fulin Transportation, you can compare the effects of market volatilities on Shanghai Ziyan and Sichuan Fulin 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 Sichuan Fulin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Ziyan and Sichuan Fulin.
Diversification Opportunities for Shanghai Ziyan and Sichuan Fulin
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Sichuan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Ziyan Foods and Sichuan Fulin Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Fulin Transp 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 Sichuan Fulin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Fulin Transp has no effect on the direction of Shanghai Ziyan i.e., Shanghai Ziyan and Sichuan Fulin go up and down completely randomly.
Pair Corralation between Shanghai Ziyan and Sichuan Fulin
Assuming the 90 days trading horizon Shanghai Ziyan Foods is expected to under-perform the Sichuan Fulin. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Ziyan Foods is 1.12 times less risky than Sichuan Fulin. The stock trades about -0.03 of its potential returns per unit of risk. The Sichuan Fulin Transportation is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 655.00 in Sichuan Fulin Transportation on October 16, 2024 and sell it today you would earn a total of 49.00 from holding Sichuan Fulin Transportation or generate 7.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Ziyan Foods vs. Sichuan Fulin Transportation
Performance |
| Timeline |
| Shanghai Ziyan Foods |
| Sichuan Fulin Transp |
Shanghai Ziyan and Sichuan Fulin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Ziyan and Sichuan Fulin
The main advantage of trading using opposite Shanghai Ziyan and Sichuan Fulin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Ziyan position performs unexpectedly, Sichuan Fulin 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 Sichuan Fulin will offset losses from the drop in Sichuan Fulin'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 |
| Sichuan Fulin vs. Harvest Fund Management | Sichuan Fulin vs. Jiahe Foods Industry | Sichuan Fulin vs. Shanghai Ziyan Foods | Sichuan Fulin vs. Jahen Household Products |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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