Correlation Between Shanghai Ziyan and Hangzhou Weiguang
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By analyzing existing cross correlation between Shanghai Ziyan Foods and Hangzhou Weiguang Electronic, you can compare the effects of market volatilities on Shanghai Ziyan and Hangzhou Weiguang 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 Hangzhou Weiguang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Ziyan and Hangzhou Weiguang.
Diversification Opportunities for Shanghai Ziyan and Hangzhou Weiguang
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Hangzhou is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Ziyan Foods and Hangzhou Weiguang Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Weiguang 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 Hangzhou Weiguang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Weiguang has no effect on the direction of Shanghai Ziyan i.e., Shanghai Ziyan and Hangzhou Weiguang go up and down completely randomly.
Pair Corralation between Shanghai Ziyan and Hangzhou Weiguang
Assuming the 90 days trading horizon Shanghai Ziyan Foods is expected to under-perform the Hangzhou Weiguang. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Ziyan Foods is 1.05 times less risky than Hangzhou Weiguang. The stock trades about -0.02 of its potential returns per unit of risk. The Hangzhou Weiguang Electronic is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,706 in Hangzhou Weiguang Electronic on October 22, 2024 and sell it today you would lose (200.00) from holding Hangzhou Weiguang Electronic or give up 7.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Shanghai Ziyan Foods vs. Hangzhou Weiguang Electronic
Performance |
| Timeline |
| Shanghai Ziyan Foods |
| Hangzhou Weiguang |
Shanghai Ziyan and Hangzhou Weiguang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Ziyan and Hangzhou Weiguang
The main advantage of trading using opposite Shanghai Ziyan and Hangzhou Weiguang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Ziyan position performs unexpectedly, Hangzhou Weiguang 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 Hangzhou Weiguang will offset losses from the drop in Hangzhou Weiguang's long position.| Shanghai Ziyan vs. Chinese Universe Publishing | Shanghai Ziyan vs. Suzhou Douson Drilling | Shanghai Ziyan vs. COL Digital Publishing | Shanghai Ziyan vs. Duzhe Publishing Media |
| Hangzhou Weiguang vs. HeNan Splendor Science | Hangzhou Weiguang vs. Tongding Interconnection Information | Hangzhou Weiguang vs. Nanjing Canatal Data | Hangzhou Weiguang vs. Unisplendour Corp |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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