Correlation Between Shanghai Rongtai and Zhongyin Babi
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By analyzing existing cross correlation between Shanghai Rongtai Health and Zhongyin Babi Food, you can compare the effects of market volatilities on Shanghai Rongtai and Zhongyin Babi 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 Zhongyin Babi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Rongtai and Zhongyin Babi.
Diversification Opportunities for Shanghai Rongtai and Zhongyin Babi
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shanghai and Zhongyin is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Rongtai Health and Zhongyin Babi Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongyin Babi Food 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 Zhongyin Babi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongyin Babi Food has no effect on the direction of Shanghai Rongtai i.e., Shanghai Rongtai and Zhongyin Babi go up and down completely randomly.
Pair Corralation between Shanghai Rongtai and Zhongyin Babi
Assuming the 90 days trading horizon Shanghai Rongtai Health is expected to generate 0.87 times more return on investment than Zhongyin Babi. However, Shanghai Rongtai Health is 1.14 times less risky than Zhongyin Babi. It trades about -0.45 of its potential returns per unit of risk. Zhongyin Babi Food is currently generating about -0.52 per unit of risk. If you would invest 1,640 in Shanghai Rongtai Health on October 14, 2024 and sell it today you would lose (307.00) from holding Shanghai Rongtai Health or give up 18.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Rongtai Health vs. Zhongyin Babi Food
Performance |
| Timeline |
| Shanghai Rongtai Health |
| Zhongyin Babi Food |
Shanghai Rongtai and Zhongyin Babi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Rongtai and Zhongyin Babi
The main advantage of trading using opposite Shanghai Rongtai and Zhongyin Babi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Rongtai position performs unexpectedly, Zhongyin Babi 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 Zhongyin Babi will offset losses from the drop in Zhongyin Babi's long position.| Shanghai Rongtai vs. Hangzhou Minsheng Healthcare | Shanghai Rongtai vs. Fujian Boss Software | Shanghai Rongtai vs. Inspur Software Co | Shanghai Rongtai vs. Youngy Health Co |
| Zhongyin Babi vs. China World Trade | Zhongyin Babi vs. Yingde Greatchem Chemicals | Zhongyin Babi vs. Do Fluoride Chemicals Co | Zhongyin Babi vs. Huatian Hotel Group |
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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