Correlation Between China Building and Shanghai Phichem
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By analyzing existing cross correlation between China Building Material and Shanghai Phichem Material, you can compare the effects of market volatilities on China Building and Shanghai Phichem 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 Building with a short position of Shanghai Phichem. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Building and Shanghai Phichem.
Diversification Opportunities for China Building and Shanghai Phichem
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Shanghai is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding China Building Material and Shanghai Phichem Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Phichem Material and China Building 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 Building Material are associated (or correlated) with Shanghai Phichem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Phichem Material has no effect on the direction of China Building i.e., China Building and Shanghai Phichem go up and down completely randomly.
Pair Corralation between China Building and Shanghai Phichem
Assuming the 90 days trading horizon China Building Material is expected to under-perform the Shanghai Phichem. But the stock apears to be less risky and, when comparing its historical volatility, China Building Material is 1.49 times less risky than Shanghai Phichem. The stock trades about -0.04 of its potential returns per unit of risk. The Shanghai Phichem Material is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,787 in Shanghai Phichem Material on October 15, 2024 and sell it today you would lose (329.00) from holding Shanghai Phichem Material or give up 18.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Building Material vs. Shanghai Phichem Material
Performance |
| Timeline |
| China Building Material |
| Shanghai Phichem Material |
China Building and Shanghai Phichem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Building and Shanghai Phichem
The main advantage of trading using opposite China Building and Shanghai Phichem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Building position performs unexpectedly, Shanghai Phichem 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 Phichem will offset losses from the drop in Shanghai Phichem's long position.| China Building vs. Jiangsu Phoenix Publishing | China Building vs. Citic Guoan Wine | China Building vs. Bank of Communications | China Building vs. Shanghai Action Education |
| Shanghai Phichem vs. Fujian Newland Computer | Shanghai Phichem vs. Telling Telecommunication Holding | Shanghai Phichem vs. Fibocom Wireless | Shanghai Phichem vs. Runjian Communication Co |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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