Correlation Between Shanghai Action and Titan Wind
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By analyzing existing cross correlation between Shanghai Action Education and Titan Wind Energy, you can compare the effects of market volatilities on Shanghai Action and Titan Wind 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 Titan Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Action and Titan Wind.
Diversification Opportunities for Shanghai Action and Titan Wind
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Titan is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Action Education and Titan Wind Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Wind Energy 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 Titan Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan Wind Energy has no effect on the direction of Shanghai Action i.e., Shanghai Action and Titan Wind go up and down completely randomly.
Pair Corralation between Shanghai Action and Titan Wind
Assuming the 90 days trading horizon Shanghai Action Education is expected to generate 1.05 times more return on investment than Titan Wind. However, Shanghai Action is 1.05 times more volatile than Titan Wind Energy. It trades about 0.04 of its potential returns per unit of risk. Titan Wind Energy is currently generating about -0.03 per unit of risk. If you would invest 2,544 in Shanghai Action Education on September 16, 2024 and sell it today you would earn a total of 1,040 from holding Shanghai Action Education or generate 40.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Action Education vs. Titan Wind Energy
Performance |
| Timeline |
| Shanghai Action Education |
| Titan Wind Energy |
Shanghai Action and Titan Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Action and Titan Wind
The main advantage of trading using opposite Shanghai Action and Titan Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Action position performs unexpectedly, Titan Wind 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 Titan Wind will offset losses from the drop in Titan Wind's long position.| Shanghai Action vs. PetroChina Co Ltd | Shanghai Action vs. China Mobile Limited | Shanghai Action vs. CNOOC Limited | Shanghai Action vs. Ping An Insurance |
| Titan Wind vs. China State Construction | Titan Wind vs. Poly Real Estate | Titan Wind vs. China Vanke Co | Titan Wind vs. China Merchants Shekou |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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