Correlation Between Sichuan Hebang and Shanghai Material
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By analyzing existing cross correlation between Sichuan Hebang Biotechnology and Shanghai Material Trading, you can compare the effects of market volatilities on Sichuan Hebang and Shanghai Material 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 Sichuan Hebang with a short position of Shanghai Material. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Hebang and Shanghai Material.
Diversification Opportunities for Sichuan Hebang and Shanghai Material
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sichuan and Shanghai is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Hebang Biotechnology and Shanghai Material Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Material Trading and Sichuan Hebang 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 Sichuan Hebang Biotechnology are associated (or correlated) with Shanghai Material. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Material Trading has no effect on the direction of Sichuan Hebang i.e., Sichuan Hebang and Shanghai Material go up and down completely randomly.
Pair Corralation between Sichuan Hebang and Shanghai Material
Assuming the 90 days trading horizon Sichuan Hebang Biotechnology is expected to under-perform the Shanghai Material. But the stock apears to be less risky and, when comparing its historical volatility, Sichuan Hebang Biotechnology is 1.92 times less risky than Shanghai Material. The stock trades about -0.07 of its potential returns per unit of risk. The Shanghai Material Trading is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 955.00 in Shanghai Material Trading on October 25, 2024 and sell it today you would lose (14.00) from holding Shanghai Material Trading or give up 1.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Hebang Biotechnology vs. Shanghai Material Trading
Performance |
| Timeline |
| Sichuan Hebang Biote |
| Shanghai Material Trading |
Sichuan Hebang and Shanghai Material Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Hebang and Shanghai Material
The main advantage of trading using opposite Sichuan Hebang and Shanghai Material positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Hebang position performs unexpectedly, Shanghai Material 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 Material will offset losses from the drop in Shanghai Material's long position.| Sichuan Hebang vs. YiDong Electronics Technology | Sichuan Hebang vs. Southern PublishingMedia Co | Sichuan Hebang vs. Offcn Education Technology | Sichuan Hebang vs. Shandong Publishing Media |
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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