Correlation Between Shanghai Shuixing and SAIC
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By analyzing existing cross correlation between Shanghai Shuixing Home and SAIC Motor Corp, you can compare the effects of market volatilities on Shanghai Shuixing and SAIC 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 SAIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Shuixing and SAIC.
Diversification Opportunities for Shanghai Shuixing and SAIC
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and SAIC is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Shuixing Home and SAIC Motor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAIC Motor Corp 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 SAIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAIC Motor Corp has no effect on the direction of Shanghai Shuixing i.e., Shanghai Shuixing and SAIC go up and down completely randomly.
Pair Corralation between Shanghai Shuixing and SAIC
Assuming the 90 days trading horizon Shanghai Shuixing is expected to generate 8.53 times less return on investment than SAIC. But when comparing it to its historical volatility, Shanghai Shuixing Home is 1.02 times less risky than SAIC. It trades about 0.01 of its potential returns per unit of risk. SAIC Motor Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,837 in SAIC Motor Corp on September 27, 2024 and sell it today you would earn a total of 48.00 from holding SAIC Motor Corp or generate 2.61% 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. SAIC Motor Corp
Performance |
| Timeline |
| Shanghai Shuixing Home |
| SAIC Motor Corp |
Shanghai Shuixing and SAIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Shuixing and SAIC
The main advantage of trading using opposite Shanghai Shuixing and SAIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Shuixing position performs unexpectedly, SAIC 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 SAIC will offset losses from the drop in SAIC'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 |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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