Correlation Between Shanghai Action and Beijing Lier
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By analyzing existing cross correlation between Shanghai Action Education and Beijing Lier High, you can compare the effects of market volatilities on Shanghai Action and Beijing Lier 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 Action with a short position of Beijing Lier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Action and Beijing Lier.
Diversification Opportunities for Shanghai Action and Beijing Lier
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shanghai and Beijing is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Action Education and Beijing Lier High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Lier High and Shanghai Action 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 Action Education are associated (or correlated) with Beijing Lier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Lier High has no effect on the direction of Shanghai Action i.e., Shanghai Action and Beijing Lier go up and down completely randomly.
Pair Corralation between Shanghai Action and Beijing Lier
Assuming the 90 days trading horizon Shanghai Action Education is expected to generate 1.28 times more return on investment than Beijing Lier. However, Shanghai Action is 1.28 times more volatile than Beijing Lier High. It trades about 0.04 of its potential returns per unit of risk. Beijing Lier High is currently generating about 0.05 per unit of risk. If you would invest 2,541 in Shanghai Action Education on September 12, 2024 and sell it today you would earn a total of 1,112 from holding Shanghai Action Education or generate 43.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Action Education vs. Beijing Lier High
Performance |
| Timeline |
| Shanghai Action Education |
| Beijing Lier High |
Shanghai Action and Beijing Lier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Action and Beijing Lier
The main advantage of trading using opposite Shanghai Action and Beijing Lier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Action position performs unexpectedly, Beijing Lier 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 Beijing Lier will offset losses from the drop in Beijing Lier's long position.| Shanghai Action vs. Lutian Machinery Co | Shanghai Action vs. PetroChina Co Ltd | Shanghai Action vs. Bank of China | Shanghai Action vs. Gansu Jiu Steel |
| Beijing Lier vs. Dongfeng Automobile Co | Beijing Lier vs. Hubei Dinglong Chemical | Beijing Lier vs. Xinxiang Chemical Fiber | Beijing Lier vs. Jiangsu Xinri E Vehicle |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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