Correlation Between Suzhou Weizhixiang and Shanghai Ziyan
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By analyzing existing cross correlation between Suzhou Weizhixiang Food and Shanghai Ziyan Foods, you can compare the effects of market volatilities on Suzhou Weizhixiang and Shanghai Ziyan 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 Suzhou Weizhixiang with a short position of Shanghai Ziyan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suzhou Weizhixiang and Shanghai Ziyan.
Diversification Opportunities for Suzhou Weizhixiang and Shanghai Ziyan
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Suzhou and Shanghai is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Suzhou Weizhixiang Food and Shanghai Ziyan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Ziyan Foods and Suzhou Weizhixiang 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 Suzhou Weizhixiang Food are associated (or correlated) with Shanghai Ziyan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Ziyan Foods has no effect on the direction of Suzhou Weizhixiang i.e., Suzhou Weizhixiang and Shanghai Ziyan go up and down completely randomly.
Pair Corralation between Suzhou Weizhixiang and Shanghai Ziyan
Assuming the 90 days trading horizon Suzhou Weizhixiang Food is expected to under-perform the Shanghai Ziyan. In addition to that, Suzhou Weizhixiang is 1.19 times more volatile than Shanghai Ziyan Foods. It trades about -0.04 of its total potential returns per unit of risk. Shanghai Ziyan Foods is currently generating about -0.03 per unit of volatility. If you would invest 2,920 in Shanghai Ziyan Foods on August 28, 2024 and sell it today you would lose (1,017) from holding Shanghai Ziyan Foods or give up 34.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suzhou Weizhixiang Food vs. Shanghai Ziyan Foods
Performance |
| Timeline |
| Suzhou Weizhixiang Food |
| Shanghai Ziyan Foods |
Suzhou Weizhixiang and Shanghai Ziyan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suzhou Weizhixiang and Shanghai Ziyan
The main advantage of trading using opposite Suzhou Weizhixiang and Shanghai Ziyan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suzhou Weizhixiang position performs unexpectedly, Shanghai Ziyan 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 Shanghai Ziyan will offset losses from the drop in Shanghai Ziyan's long position.| Suzhou Weizhixiang vs. China Petroleum Chemical | Suzhou Weizhixiang vs. PetroChina Co Ltd | Suzhou Weizhixiang vs. China State Construction | Suzhou Weizhixiang vs. China Railway Group |
| Shanghai Ziyan vs. Industrial and Commercial | Shanghai Ziyan vs. Agricultural Bank of | Shanghai Ziyan vs. China Construction Bank | Shanghai Ziyan vs. Bank of China |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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