Correlation Between Shanghai Rongtai and Guangzhou Boji
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By analyzing existing cross correlation between Shanghai Rongtai Health and Guangzhou Boji Medical, you can compare the effects of market volatilities on Shanghai Rongtai and Guangzhou Boji 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 Rongtai with a short position of Guangzhou Boji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Rongtai and Guangzhou Boji.
Diversification Opportunities for Shanghai Rongtai and Guangzhou Boji
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shanghai and Guangzhou is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Rongtai Health and Guangzhou Boji Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Boji Medical and Shanghai Rongtai 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 Rongtai Health are associated (or correlated) with Guangzhou Boji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Boji Medical has no effect on the direction of Shanghai Rongtai i.e., Shanghai Rongtai and Guangzhou Boji go up and down completely randomly.
Pair Corralation between Shanghai Rongtai and Guangzhou Boji
Assuming the 90 days trading horizon Shanghai Rongtai Health is expected to generate 0.58 times more return on investment than Guangzhou Boji. However, Shanghai Rongtai Health is 1.71 times less risky than Guangzhou Boji. It trades about 0.21 of its potential returns per unit of risk. Guangzhou Boji Medical is currently generating about 0.05 per unit of risk. If you would invest 1,440 in Shanghai Rongtai Health on September 13, 2024 and sell it today you would earn a total of 126.00 from holding Shanghai Rongtai Health or generate 8.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Shanghai Rongtai Health vs. Guangzhou Boji Medical
Performance |
Timeline |
Shanghai Rongtai Health |
Guangzhou Boji Medical |
Shanghai Rongtai and Guangzhou Boji Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shanghai Rongtai and Guangzhou Boji
The main advantage of trading using opposite Shanghai Rongtai and Guangzhou Boji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Rongtai position performs unexpectedly, Guangzhou Boji 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 Guangzhou Boji will offset losses from the drop in Guangzhou Boji's long position.Shanghai Rongtai vs. Lutian Machinery Co | Shanghai Rongtai vs. China Longyuan Power | Shanghai Rongtai vs. PetroChina Co Ltd | Shanghai Rongtai vs. Bank of China |
Guangzhou Boji vs. China Life Insurance | Guangzhou Boji vs. Cinda Securities Co | Guangzhou Boji vs. Piotech Inc A | Guangzhou Boji vs. Dongxing Sec Co |
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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