Correlation Between Shanghai AtHub and Hubei Tech
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By analyzing existing cross correlation between Shanghai AtHub Co and Hubei Tech Semiconductors, you can compare the effects of market volatilities on Shanghai AtHub and Hubei Tech 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 AtHub with a short position of Hubei Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai AtHub and Hubei Tech.
Diversification Opportunities for Shanghai AtHub and Hubei Tech
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shanghai and Hubei is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai AtHub Co and Hubei Tech Semiconductors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Tech Semiconductors and Shanghai AtHub 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 AtHub Co are associated (or correlated) with Hubei Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Tech Semiconductors has no effect on the direction of Shanghai AtHub i.e., Shanghai AtHub and Hubei Tech go up and down completely randomly.
Pair Corralation between Shanghai AtHub and Hubei Tech
Assuming the 90 days trading horizon Shanghai AtHub Co is expected to generate 1.32 times more return on investment than Hubei Tech. However, Shanghai AtHub is 1.32 times more volatile than Hubei Tech Semiconductors. It trades about 0.33 of its potential returns per unit of risk. Hubei Tech Semiconductors is currently generating about 0.05 per unit of risk. If you would invest 1,765 in Shanghai AtHub Co on November 7, 2024 and sell it today you would earn a total of 419.00 from holding Shanghai AtHub Co or generate 23.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai AtHub Co vs. Hubei Tech Semiconductors
Performance |
| Timeline |
| Shanghai AtHub |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Hubei Tech Semiconductors |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shanghai AtHub and Hubei Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai AtHub and Hubei Tech
The main advantage of trading using opposite Shanghai AtHub and Hubei Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai AtHub position performs unexpectedly, Hubei Tech 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 Hubei Tech will offset losses from the drop in Hubei Tech's long position.The idea behind Shanghai AtHub Co and Hubei Tech Semiconductors pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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