Correlation Between Shanghai Rongtai and Heren Health
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By analyzing existing cross correlation between Shanghai Rongtai Health and Heren Health Co, you can compare the effects of market volatilities on Shanghai Rongtai and Heren Health 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 Heren Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Rongtai and Heren Health.
Diversification Opportunities for Shanghai Rongtai and Heren Health
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Heren is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Rongtai Health and Heren Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heren Health 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 Heren Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heren Health has no effect on the direction of Shanghai Rongtai i.e., Shanghai Rongtai and Heren Health go up and down completely randomly.
Pair Corralation between Shanghai Rongtai and Heren Health
Assuming the 90 days trading horizon Shanghai Rongtai Health is expected to under-perform the Heren Health. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Rongtai Health is 1.55 times less risky than Heren Health. The stock trades about -0.02 of its potential returns per unit of risk. The Heren Health Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,524 in Heren Health Co on October 19, 2024 and sell it today you would lose (184.00) from holding Heren Health Co or give up 12.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Rongtai Health vs. Heren Health Co
Performance |
| Timeline |
| Shanghai Rongtai Health |
| Heren Health |
Shanghai Rongtai and Heren Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Rongtai and Heren Health
The main advantage of trading using opposite Shanghai Rongtai and Heren Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Rongtai position performs unexpectedly, Heren Health 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 Heren Health will offset losses from the drop in Heren Health's long position.| Shanghai Rongtai vs. Ningxia Younglight Chemicals | Shanghai Rongtai vs. Jinhui Liquor Co | Shanghai Rongtai vs. Huasi Agricultural Development | Shanghai Rongtai vs. Weichai Heavy Machinery |
| Heren Health vs. Guangdong Jinma Entertainment | Heren Health vs. Zhengzhou Coal Mining | Heren Health vs. Southern PublishingMedia Co | Heren Health vs. Guocheng Mining 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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