Correlation Between Shanghai Action and China Building
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By analyzing existing cross correlation between Shanghai Action Education and China Building Material, you can compare the effects of market volatilities on Shanghai Action and China Building 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 China Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Action and China Building.
Diversification Opportunities for Shanghai Action and China Building
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shanghai and China is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Action Education and China Building Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Building Material 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 China Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Building Material has no effect on the direction of Shanghai Action i.e., Shanghai Action and China Building go up and down completely randomly.
Pair Corralation between Shanghai Action and China Building
Assuming the 90 days trading horizon Shanghai Action Education is expected to generate 1.16 times more return on investment than China Building. However, Shanghai Action is 1.16 times more volatile than China Building Material. It trades about -0.11 of its potential returns per unit of risk. China Building Material is currently generating about -0.42 per unit of risk. If you would invest 3,711 in Shanghai Action Education on October 16, 2024 and sell it today you would lose (207.00) from holding Shanghai Action Education or give up 5.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Action Education vs. China Building Material
Performance |
| Timeline |
| Shanghai Action Education |
| China Building Material |
Shanghai Action and China Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Action and China Building
The main advantage of trading using opposite Shanghai Action and China Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Action position performs unexpectedly, China Building 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 China Building will offset losses from the drop in China Building's long position.| Shanghai Action vs. CIMC Vehicles Co | Shanghai Action vs. Iat Automobile Technology | Shanghai Action vs. Runjian Communication Co | Shanghai Action vs. State Grid InformationCommunication |
| China Building vs. Jiangsu Phoenix Publishing | China Building vs. Citic Guoan Wine | China Building vs. Bank of Communications | China Building vs. Shanghai Action Education |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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