Correlation Between Shanghai Shuixing and Suzhou Novoprotein
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By analyzing existing cross correlation between Shanghai Shuixing Home and Suzhou Novoprotein Scientific, you can compare the effects of market volatilities on Shanghai Shuixing and Suzhou Novoprotein 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 Suzhou Novoprotein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Shuixing and Suzhou Novoprotein.
Diversification Opportunities for Shanghai Shuixing and Suzhou Novoprotein
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Suzhou is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Shuixing Home and Suzhou Novoprotein Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou Novoprotein 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 Suzhou Novoprotein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou Novoprotein has no effect on the direction of Shanghai Shuixing i.e., Shanghai Shuixing and Suzhou Novoprotein go up and down completely randomly.
Pair Corralation between Shanghai Shuixing and Suzhou Novoprotein
Assuming the 90 days trading horizon Shanghai Shuixing Home is expected to generate 0.77 times more return on investment than Suzhou Novoprotein. However, Shanghai Shuixing Home is 1.31 times less risky than Suzhou Novoprotein. It trades about 0.03 of its potential returns per unit of risk. Suzhou Novoprotein Scientific is currently generating about -0.04 per unit of risk. If you would invest 1,291 in Shanghai Shuixing Home on September 12, 2024 and sell it today you would earn a total of 326.00 from holding Shanghai Shuixing Home or generate 25.25% 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. Suzhou Novoprotein Scientific
Performance |
| Timeline |
| Shanghai Shuixing Home |
| Suzhou Novoprotein |
Shanghai Shuixing and Suzhou Novoprotein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Shuixing and Suzhou Novoprotein
The main advantage of trading using opposite Shanghai Shuixing and Suzhou Novoprotein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Shuixing position performs unexpectedly, Suzhou Novoprotein 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 Suzhou Novoprotein will offset losses from the drop in Suzhou Novoprotein's long position.| Shanghai Shuixing vs. Lutian Machinery Co | Shanghai Shuixing vs. PetroChina Co Ltd | Shanghai Shuixing vs. Bank of China | Shanghai Shuixing vs. Gansu Jiu Steel |
| Suzhou Novoprotein vs. Shanghai Shuixing Home | Suzhou Novoprotein vs. Markor International Home | Suzhou Novoprotein vs. Qumei Furniture Group | Suzhou Novoprotein vs. Xinhua Winshare Publishing |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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