Correlation Between Shanghai Shuixing and Sichuan Yahua
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By analyzing existing cross correlation between Shanghai Shuixing Home and Sichuan Yahua Industrial, you can compare the effects of market volatilities on Shanghai Shuixing and Sichuan Yahua 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 Sichuan Yahua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Shuixing and Sichuan Yahua.
Diversification Opportunities for Shanghai Shuixing and Sichuan Yahua
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Sichuan is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Shuixing Home and Sichuan Yahua Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Yahua Industrial 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 Sichuan Yahua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Yahua Industrial has no effect on the direction of Shanghai Shuixing i.e., Shanghai Shuixing and Sichuan Yahua go up and down completely randomly.
Pair Corralation between Shanghai Shuixing and Sichuan Yahua
Assuming the 90 days trading horizon Shanghai Shuixing Home is expected to under-perform the Sichuan Yahua. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Shuixing Home is 1.08 times less risky than Sichuan Yahua. The stock trades about -0.03 of its potential returns per unit of risk. The Sichuan Yahua Industrial is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,260 in Sichuan Yahua Industrial on October 18, 2024 and sell it today you would earn a total of 12.00 from holding Sichuan Yahua Industrial or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Shuixing Home vs. Sichuan Yahua Industrial
Performance |
| Timeline |
| Shanghai Shuixing Home |
| Sichuan Yahua Industrial |
Shanghai Shuixing and Sichuan Yahua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Shuixing and Sichuan Yahua
The main advantage of trading using opposite Shanghai Shuixing and Sichuan Yahua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Shuixing position performs unexpectedly, Sichuan Yahua 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 Sichuan Yahua will offset losses from the drop in Sichuan Yahua's long position.| Shanghai Shuixing vs. Xiangyang Automobile Bearing | Shanghai Shuixing vs. Guangdong Shenglu Telecommunication | Shanghai Shuixing vs. Anhui Tongguan Copper | Shanghai Shuixing vs. Anhui Jianghuai Automobile |
| Sichuan Yahua vs. DO Home Collection | Sichuan Yahua vs. Fiberhome Telecommunication Technologies | Sichuan Yahua vs. Shanghai Shuixing Home | Sichuan Yahua vs. UE Furniture 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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