Correlation Between Shanghai Shuixing and Hunan Fangsheng
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By analyzing existing cross correlation between Shanghai Shuixing Home and Hunan Fangsheng Pharm, you can compare the effects of market volatilities on Shanghai Shuixing and Hunan Fangsheng 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 Hunan Fangsheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Shuixing and Hunan Fangsheng.
Diversification Opportunities for Shanghai Shuixing and Hunan Fangsheng
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shanghai and Hunan is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Shuixing Home and Hunan Fangsheng Pharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Fangsheng Pharm 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 Hunan Fangsheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Fangsheng Pharm has no effect on the direction of Shanghai Shuixing i.e., Shanghai Shuixing and Hunan Fangsheng go up and down completely randomly.
Pair Corralation between Shanghai Shuixing and Hunan Fangsheng
Assuming the 90 days trading horizon Shanghai Shuixing Home is expected to generate 1.24 times more return on investment than Hunan Fangsheng. However, Shanghai Shuixing is 1.24 times more volatile than Hunan Fangsheng Pharm. It trades about -0.11 of its potential returns per unit of risk. Hunan Fangsheng Pharm is currently generating about -0.18 per unit of risk. If you would invest 1,679 in Shanghai Shuixing Home on October 24, 2024 and sell it today you would lose (125.00) from holding Shanghai Shuixing Home or give up 7.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Shuixing Home vs. Hunan Fangsheng Pharm
Performance |
| Timeline |
| Shanghai Shuixing Home |
| Hunan Fangsheng Pharm |
Shanghai Shuixing and Hunan Fangsheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Shuixing and Hunan Fangsheng
The main advantage of trading using opposite Shanghai Shuixing and Hunan Fangsheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Shuixing position performs unexpectedly, Hunan Fangsheng 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 Hunan Fangsheng will offset losses from the drop in Hunan Fangsheng's long position.| Shanghai Shuixing vs. Tieling Newcity Investment | Shanghai Shuixing vs. Zhejiang Construction Investment | Shanghai Shuixing vs. Zotye Automobile Co | Shanghai Shuixing vs. Tongyu Communication |
| Hunan Fangsheng vs. Shanghai Shuixing Home | Hunan Fangsheng vs. Oppein Home Group | Hunan Fangsheng vs. Easyhome New Retail | Hunan Fangsheng vs. Nanjing OLO Home |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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