Correlation Between Shanghai Shuixing and Mengtian Home
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By analyzing existing cross correlation between Shanghai Shuixing Home and Mengtian Home Group, you can compare the effects of market volatilities on Shanghai Shuixing and Mengtian Home 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 Mengtian Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Shuixing and Mengtian Home.
Diversification Opportunities for Shanghai Shuixing and Mengtian Home
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Mengtian is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Shuixing Home and Mengtian Home Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mengtian Home Group 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 Mengtian Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mengtian Home Group has no effect on the direction of Shanghai Shuixing i.e., Shanghai Shuixing and Mengtian Home go up and down completely randomly.
Pair Corralation between Shanghai Shuixing and Mengtian Home
Assuming the 90 days trading horizon Shanghai Shuixing Home is expected to generate 2.22 times more return on investment than Mengtian Home. However, Shanghai Shuixing is 2.22 times more volatile than Mengtian Home Group. It trades about 0.31 of its potential returns per unit of risk. Mengtian Home Group is currently generating about 0.18 per unit of risk. If you would invest 1,330 in Shanghai Shuixing Home on September 1, 2024 and sell it today you would earn a total of 314.00 from holding Shanghai Shuixing Home or generate 23.61% 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. Mengtian Home Group
Performance |
| Timeline |
| Shanghai Shuixing Home |
| Mengtian Home Group |
Shanghai Shuixing and Mengtian Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Shuixing and Mengtian Home
The main advantage of trading using opposite Shanghai Shuixing and Mengtian Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Shuixing position performs unexpectedly, Mengtian Home 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 Mengtian Home will offset losses from the drop in Mengtian Home's long position.| Shanghai Shuixing vs. Chengdu Kanghua Biological | Shanghai Shuixing vs. Beijing Wantai Biological | Shanghai Shuixing vs. Suzhou Novoprotein Scientific | Shanghai Shuixing vs. Aluminum Corp of |
| Mengtian Home vs. China Publishing Media | Mengtian Home vs. Time Publishing and | Mengtian Home vs. Yingde Greatchem Chemicals | Mengtian Home vs. Focus Media Information |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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