Correlation Between Shanghai Shuixing and Hunan Valin
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By analyzing existing cross correlation between Shanghai Shuixing Home and Hunan Valin Steel, you can compare the effects of market volatilities on Shanghai Shuixing and Hunan Valin 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 Shuixing with a short position of Hunan Valin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Shuixing and Hunan Valin.
Diversification Opportunities for Shanghai Shuixing and Hunan Valin
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Hunan is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Shuixing Home and Hunan Valin Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Valin Steel and Shanghai Shuixing 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 Shuixing Home are associated (or correlated) with Hunan Valin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Valin Steel has no effect on the direction of Shanghai Shuixing i.e., Shanghai Shuixing and Hunan Valin go up and down completely randomly.
Pair Corralation between Shanghai Shuixing and Hunan Valin
Assuming the 90 days trading horizon Shanghai Shuixing Home is expected to generate 1.05 times more return on investment than Hunan Valin. However, Shanghai Shuixing is 1.05 times more volatile than Hunan Valin Steel. It trades about 0.04 of its potential returns per unit of risk. Hunan Valin Steel is currently generating about 0.02 per unit of risk. If you would invest 1,254 in Shanghai Shuixing Home on September 13, 2024 and sell it today you would earn a total of 386.00 from holding Shanghai Shuixing Home or generate 30.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Shanghai Shuixing Home vs. Hunan Valin Steel
Performance |
| Timeline |
| Shanghai Shuixing Home |
| Hunan Valin Steel |
Shanghai Shuixing and Hunan Valin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Shuixing and Hunan Valin
The main advantage of trading using opposite Shanghai Shuixing and Hunan Valin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Shuixing position performs unexpectedly, Hunan Valin 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 Hunan Valin will offset losses from the drop in Hunan Valin's long position.| Shanghai Shuixing vs. Nanjing Putian Telecommunications | Shanghai Shuixing vs. Tianjin Realty Development | Shanghai Shuixing vs. Kangyue Technology Co | Shanghai Shuixing vs. Shenzhen Hifuture Electric |
| Hunan Valin vs. Shanghai Shuixing Home | Hunan Valin vs. Quectel Wireless Solutions | Hunan Valin vs. Shenzhen Topway Video | Hunan Valin vs. Mengtian Home Group |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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