Correlation Between Shanghai Shuixing and Dongguan Aohai
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By analyzing existing cross correlation between Shanghai Shuixing Home and Dongguan Aohai Technology, you can compare the effects of market volatilities on Shanghai Shuixing and Dongguan Aohai 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 Dongguan Aohai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Shuixing and Dongguan Aohai.
Diversification Opportunities for Shanghai Shuixing and Dongguan Aohai
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shanghai and Dongguan is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Shuixing Home and Dongguan Aohai Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongguan Aohai 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 Dongguan Aohai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongguan Aohai Technology has no effect on the direction of Shanghai Shuixing i.e., Shanghai Shuixing and Dongguan Aohai go up and down completely randomly.
Pair Corralation between Shanghai Shuixing and Dongguan Aohai
Assuming the 90 days trading horizon Shanghai Shuixing is expected to generate 54.76 times less return on investment than Dongguan Aohai. But when comparing it to its historical volatility, Shanghai Shuixing Home is 1.3 times less risky than Dongguan Aohai. It trades about 0.01 of its potential returns per unit of risk. Dongguan Aohai Technology is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 3,251 in Dongguan Aohai Technology on September 27, 2024 and sell it today you would earn a total of 801.00 from holding Dongguan Aohai Technology or generate 24.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Shuixing Home vs. Dongguan Aohai Technology
Performance |
| Timeline |
| Shanghai Shuixing Home |
| Dongguan Aohai Technology |
Shanghai Shuixing and Dongguan Aohai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Shuixing and Dongguan Aohai
The main advantage of trading using opposite Shanghai Shuixing and Dongguan Aohai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Shuixing position performs unexpectedly, Dongguan Aohai 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 Dongguan Aohai will offset losses from the drop in Dongguan Aohai'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 |
| Dongguan Aohai vs. Pengxin International Mining | Dongguan Aohai vs. Guocheng Mining Co | Dongguan Aohai vs. Zhangjiagang Freetrade Science | Dongguan Aohai vs. Chongqing Changan Automobile |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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