Correlation Between Shanghai Shuixing and Kuangda Technology
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By analyzing existing cross correlation between Shanghai Shuixing Home and Kuangda Technology Group, you can compare the effects of market volatilities on Shanghai Shuixing and Kuangda Technology 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 Kuangda Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Shuixing and Kuangda Technology.
Diversification Opportunities for Shanghai Shuixing and Kuangda Technology
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Kuangda is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Shuixing Home and Kuangda Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuangda Technology 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 Kuangda Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuangda Technology has no effect on the direction of Shanghai Shuixing i.e., Shanghai Shuixing and Kuangda Technology go up and down completely randomly.
Pair Corralation between Shanghai Shuixing and Kuangda Technology
Assuming the 90 days trading horizon Shanghai Shuixing is expected to generate 5.63 times less return on investment than Kuangda Technology. But when comparing it to its historical volatility, Shanghai Shuixing Home is 1.16 times less risky than Kuangda Technology. It trades about 0.01 of its potential returns per unit of risk. Kuangda Technology Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 516.00 in Kuangda Technology Group on September 27, 2024 and sell it today you would earn a total of 5.00 from holding Kuangda Technology Group or generate 0.97% 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. Kuangda Technology Group
Performance |
| Timeline |
| Shanghai Shuixing Home |
| Kuangda Technology |
Shanghai Shuixing and Kuangda Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Shuixing and Kuangda Technology
The main advantage of trading using opposite Shanghai Shuixing and Kuangda Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Shuixing position performs unexpectedly, Kuangda Technology 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 Kuangda Technology will offset losses from the drop in Kuangda Technology's long position.| Shanghai Shuixing vs. Aerospace Hi Tech Holding | Shanghai Shuixing vs. Sinomach General Machinery | Shanghai Shuixing vs. Shantui Construction Machinery | Shanghai Shuixing vs. Zhejiang JIULI Hi tech |
| Kuangda Technology vs. Eastroc Beverage Group | Kuangda Technology vs. Hubei Dinglong Chemical | Kuangda Technology vs. Guangzhou Seagull Kitchen | Kuangda Technology vs. Guizhou Chanhen Chemical |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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