Correlation Between Shanghai Shuixing and Nanjing Putian
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By analyzing existing cross correlation between Shanghai Shuixing Home and Nanjing Putian Telecommunications, you can compare the effects of market volatilities on Shanghai Shuixing and Nanjing Putian 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 Nanjing Putian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Shuixing and Nanjing Putian.
Diversification Opportunities for Shanghai Shuixing and Nanjing Putian
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Nanjing is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Shuixing Home and Nanjing Putian Telecommunicati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing Putian Telec 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 Nanjing Putian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing Putian Telec has no effect on the direction of Shanghai Shuixing i.e., Shanghai Shuixing and Nanjing Putian go up and down completely randomly.
Pair Corralation between Shanghai Shuixing and Nanjing Putian
Assuming the 90 days trading horizon Shanghai Shuixing Home is expected to generate 0.78 times more return on investment than Nanjing Putian. However, Shanghai Shuixing Home is 1.27 times less risky than Nanjing Putian. It trades about 0.33 of its potential returns per unit of risk. Nanjing Putian Telecommunications is currently generating about -0.08 per unit of risk. If you would invest 1,388 in Shanghai Shuixing Home on September 14, 2024 and sell it today you would earn a total of 416.00 from holding Shanghai Shuixing Home or generate 29.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Shuixing Home vs. Nanjing Putian Telecommunicati
Performance |
| Timeline |
| Shanghai Shuixing Home |
| Nanjing Putian Telec |
Shanghai Shuixing and Nanjing Putian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Shuixing and Nanjing Putian
The main advantage of trading using opposite Shanghai Shuixing and Nanjing Putian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Shuixing position performs unexpectedly, Nanjing Putian 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 Nanjing Putian will offset losses from the drop in Nanjing Putian'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 |
| Nanjing Putian vs. Industrial and Commercial | Nanjing Putian vs. China Construction Bank | Nanjing Putian vs. Bank of China | Nanjing Putian vs. Agricultural Bank of |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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