Correlation Between Shanghai Shuixing and Chengdu Kanghua
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By analyzing existing cross correlation between Shanghai Shuixing Home and Chengdu Kanghua Biological, you can compare the effects of market volatilities on Shanghai Shuixing and Chengdu Kanghua 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 Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Shuixing and Chengdu Kanghua.
Diversification Opportunities for Shanghai Shuixing and Chengdu Kanghua
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Chengdu is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Shuixing Home and Chengdu Kanghua Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Kanghua Biol 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 Chengdu Kanghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Kanghua Biol has no effect on the direction of Shanghai Shuixing i.e., Shanghai Shuixing and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between Shanghai Shuixing and Chengdu Kanghua
Assuming the 90 days trading horizon Shanghai Shuixing Home is expected to generate 0.71 times more return on investment than Chengdu Kanghua. However, Shanghai Shuixing Home is 1.41 times less risky than Chengdu Kanghua. It trades about 0.04 of its potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about -0.01 per unit of risk. If you would invest 1,297 in Shanghai Shuixing Home on September 3, 2024 and sell it today you would earn a total of 347.00 from holding Shanghai Shuixing Home or generate 26.75% 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. Chengdu Kanghua Biological
Performance |
| Timeline |
| Shanghai Shuixing Home |
| Chengdu Kanghua Biol |
Shanghai Shuixing and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Shuixing and Chengdu Kanghua
The main advantage of trading using opposite Shanghai Shuixing and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Shuixing position performs unexpectedly, Chengdu Kanghua 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 Chengdu Kanghua will offset losses from the drop in Chengdu Kanghua's long position.| Shanghai Shuixing vs. Cofoe Medical Technology | Shanghai Shuixing vs. Qingdao Baheal Medical | Shanghai Shuixing vs. Jinling Hotel Corp | Shanghai Shuixing vs. Allmed Medical Products |
| Chengdu Kanghua vs. Chengdu Xinzhu RoadBridge | Chengdu Kanghua vs. China Life Insurance | Chengdu Kanghua vs. Shaanxi Broadcast TV | Chengdu Kanghua vs. Tianshan Aluminum 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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