Correlation Between Mengtian Home and Shanghai Broadband
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By analyzing existing cross correlation between Mengtian Home Group and Shanghai Broadband Technology, you can compare the effects of market volatilities on Mengtian Home and Shanghai Broadband 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 Mengtian Home with a short position of Shanghai Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mengtian Home and Shanghai Broadband.
Diversification Opportunities for Mengtian Home and Shanghai Broadband
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mengtian and Shanghai is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Mengtian Home Group and Shanghai Broadband Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Broadband and Mengtian Home 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 Mengtian Home Group are associated (or correlated) with Shanghai Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Broadband has no effect on the direction of Mengtian Home i.e., Mengtian Home and Shanghai Broadband go up and down completely randomly.
Pair Corralation between Mengtian Home and Shanghai Broadband
Assuming the 90 days trading horizon Mengtian Home Group is expected to generate 0.58 times more return on investment than Shanghai Broadband. However, Mengtian Home Group is 1.71 times less risky than Shanghai Broadband. It trades about 0.19 of its potential returns per unit of risk. Shanghai Broadband Technology is currently generating about 0.11 per unit of risk. If you would invest 1,054 in Mengtian Home Group on September 13, 2024 and sell it today you would earn a total of 63.00 from holding Mengtian Home Group or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mengtian Home Group vs. Shanghai Broadband Technology
Performance |
| Timeline |
| Mengtian Home Group |
| Shanghai Broadband |
Mengtian Home and Shanghai Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mengtian Home and Shanghai Broadband
The main advantage of trading using opposite Mengtian Home and Shanghai Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mengtian Home position performs unexpectedly, Shanghai Broadband 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 Broadband will offset losses from the drop in Shanghai Broadband's long position.| Mengtian Home vs. Lutian Machinery Co | Mengtian Home vs. China Longyuan Power | Mengtian Home vs. PetroChina Co Ltd | Mengtian Home vs. Bank of China |
| Shanghai Broadband vs. Zijin Mining Group | Shanghai Broadband vs. Wanhua Chemical Group | Shanghai Broadband vs. Baoshan Iron Steel | Shanghai Broadband 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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