Correlation Between Shanghai Shuixing and Shandong Homey
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By analyzing existing cross correlation between Shanghai Shuixing Home and Shandong Homey Aquatic, you can compare the effects of market volatilities on Shanghai Shuixing and Shandong Homey 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 Shandong Homey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Shuixing and Shandong Homey.
Diversification Opportunities for Shanghai Shuixing and Shandong Homey
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Shandong is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Shuixing Home and Shandong Homey Aquatic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Homey Aquatic 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 Shandong Homey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Homey Aquatic has no effect on the direction of Shanghai Shuixing i.e., Shanghai Shuixing and Shandong Homey go up and down completely randomly.
Pair Corralation between Shanghai Shuixing and Shandong Homey
Assuming the 90 days trading horizon Shanghai Shuixing Home is expected to generate 0.97 times more return on investment than Shandong Homey. However, Shanghai Shuixing Home is 1.03 times less risky than Shandong Homey. It trades about 0.04 of its potential returns per unit of risk. Shandong Homey Aquatic is currently generating about -0.3 per unit of risk. If you would invest 1,640 in Shanghai Shuixing Home on October 12, 2024 and sell it today you would earn a total of 29.00 from holding Shanghai Shuixing Home or generate 1.77% 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. Shandong Homey Aquatic
Performance |
| Timeline |
| Shanghai Shuixing Home |
| Shandong Homey Aquatic |
Shanghai Shuixing and Shandong Homey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Shuixing and Shandong Homey
The main advantage of trading using opposite Shanghai Shuixing and Shandong Homey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Shuixing position performs unexpectedly, Shandong Homey 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 Shandong Homey will offset losses from the drop in Shandong Homey's long position.| Shanghai Shuixing vs. Guangxi Wuzhou Communications | Shanghai Shuixing vs. JuneYao Dairy Co | Shanghai Shuixing vs. Guilin Seamild Foods | Shanghai Shuixing vs. Hangzhou Arcvideo Technology |
| Shandong Homey vs. Shanghai Rongtai Health | Shandong Homey vs. China Sports Industry | Shandong Homey vs. Mingchen Health Co | Shandong Homey vs. CareRay Digital Medical |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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