Correlation Between Shanghai Rongtai and Hangzhou Coco
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By analyzing existing cross correlation between Shanghai Rongtai Health and Hangzhou Coco Healthcare, you can compare the effects of market volatilities on Shanghai Rongtai and Hangzhou Coco 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 Hangzhou Coco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Rongtai and Hangzhou Coco.
Diversification Opportunities for Shanghai Rongtai and Hangzhou Coco
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shanghai and Hangzhou is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Rongtai Health and Hangzhou Coco Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Coco Healthcare 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 Hangzhou Coco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Coco Healthcare has no effect on the direction of Shanghai Rongtai i.e., Shanghai Rongtai and Hangzhou Coco go up and down completely randomly.
Pair Corralation between Shanghai Rongtai and Hangzhou Coco
Assuming the 90 days trading horizon Shanghai Rongtai is expected to generate 1.01 times less return on investment than Hangzhou Coco. But when comparing it to its historical volatility, Shanghai Rongtai Health is 1.48 times less risky than Hangzhou Coco. It trades about 0.21 of its potential returns per unit of risk. Hangzhou Coco Healthcare is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 938.00 in Hangzhou Coco Healthcare on September 13, 2024 and sell it today you would earn a total of 82.00 from holding Hangzhou Coco Healthcare or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shanghai Rongtai Health vs. Hangzhou Coco Healthcare
Performance |
| Timeline |
| Shanghai Rongtai Health |
| Hangzhou Coco Healthcare |
Shanghai Rongtai and Hangzhou Coco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Rongtai and Hangzhou Coco
The main advantage of trading using opposite Shanghai Rongtai and Hangzhou Coco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Rongtai position performs unexpectedly, Hangzhou Coco 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 Hangzhou Coco will offset losses from the drop in Hangzhou Coco'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 |
| Hangzhou Coco vs. Agricultural Bank of | Hangzhou Coco vs. Industrial and Commercial | Hangzhou Coco vs. Bank of China | Hangzhou Coco vs. PetroChina Co Ltd |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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