Correlation Between Changshu Tongrun and Shanghai Baosight
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By analyzing existing cross correlation between Changshu Tongrun Auto and Shanghai Baosight Software, you can compare the effects of market volatilities on Changshu Tongrun and Shanghai Baosight 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 Changshu Tongrun with a short position of Shanghai Baosight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changshu Tongrun and Shanghai Baosight.
Diversification Opportunities for Changshu Tongrun and Shanghai Baosight
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changshu and Shanghai is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Changshu Tongrun Auto and Shanghai Baosight Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Baosight and Changshu Tongrun 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 Changshu Tongrun Auto are associated (or correlated) with Shanghai Baosight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Baosight has no effect on the direction of Changshu Tongrun i.e., Changshu Tongrun and Shanghai Baosight go up and down completely randomly.
Pair Corralation between Changshu Tongrun and Shanghai Baosight
Assuming the 90 days trading horizon Changshu Tongrun Auto is expected to generate 1.88 times more return on investment than Shanghai Baosight. However, Changshu Tongrun is 1.88 times more volatile than Shanghai Baosight Software. It trades about 0.09 of its potential returns per unit of risk. Shanghai Baosight Software is currently generating about 0.1 per unit of risk. If you would invest 1,644 in Changshu Tongrun Auto on August 30, 2024 and sell it today you would earn a total of 115.00 from holding Changshu Tongrun Auto or generate 7.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changshu Tongrun Auto vs. Shanghai Baosight Software
Performance |
| Timeline |
| Changshu Tongrun Auto |
| Shanghai Baosight |
Changshu Tongrun and Shanghai Baosight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changshu Tongrun and Shanghai Baosight
The main advantage of trading using opposite Changshu Tongrun and Shanghai Baosight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changshu Tongrun position performs unexpectedly, Shanghai Baosight 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 Baosight will offset losses from the drop in Shanghai Baosight's long position.| Changshu Tongrun vs. CITIC Metal Co | Changshu Tongrun vs. Xilong Chemical Co | Changshu Tongrun vs. Jilin Chemical Fibre | Changshu Tongrun vs. Liuzhou Chemical Industry |
| Shanghai Baosight vs. Anji Foodstuff Co | Shanghai Baosight vs. Guocheng Mining Co | Shanghai Baosight vs. Western Mining Co | Shanghai Baosight vs. HaiXin Foods 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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