Correlation Between Shanghai Ziyan and Sichuan Hebang
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By analyzing existing cross correlation between Shanghai Ziyan Foods and Sichuan Hebang Biotechnology, you can compare the effects of market volatilities on Shanghai Ziyan and Sichuan Hebang 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 Hebang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Ziyan and Sichuan Hebang.
Diversification Opportunities for Shanghai Ziyan and Sichuan Hebang
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Sichuan is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Ziyan Foods and Sichuan Hebang Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Hebang Biote 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 Hebang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Hebang Biote has no effect on the direction of Shanghai Ziyan i.e., Shanghai Ziyan and Sichuan Hebang go up and down completely randomly.
Pair Corralation between Shanghai Ziyan and Sichuan Hebang
Assuming the 90 days trading horizon Shanghai Ziyan Foods is expected to generate 1.33 times more return on investment than Sichuan Hebang. However, Shanghai Ziyan is 1.33 times more volatile than Sichuan Hebang Biotechnology. It trades about 0.23 of its potential returns per unit of risk. Sichuan Hebang Biotechnology is currently generating about -0.12 per unit of risk. If you would invest 1,696 in Shanghai Ziyan Foods on August 28, 2024 and sell it today you would earn a total of 207.00 from holding Shanghai Ziyan Foods or generate 12.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shanghai Ziyan Foods vs. Sichuan Hebang Biotechnology
Performance |
| Timeline |
| Shanghai Ziyan Foods |
| Sichuan Hebang Biote |
Shanghai Ziyan and Sichuan Hebang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Ziyan and Sichuan Hebang
The main advantage of trading using opposite Shanghai Ziyan and Sichuan Hebang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Ziyan position performs unexpectedly, Sichuan Hebang 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 Hebang will offset losses from the drop in Sichuan Hebang's long position.| Shanghai Ziyan vs. Industrial and Commercial | Shanghai Ziyan vs. Agricultural Bank of | Shanghai Ziyan vs. China Construction Bank | Shanghai Ziyan vs. Bank of China |
| Sichuan Hebang vs. Zijin Mining Group | Sichuan Hebang vs. Wanhua Chemical Group | Sichuan Hebang vs. Baoshan Iron Steel | Sichuan Hebang vs. Shandong Gold Mining |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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