Correlation Between Heilongjiang Publishing and Shanghai Metersbonwe
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By analyzing existing cross correlation between Heilongjiang Publishing Media and Shanghai Metersbonwe FashionAccessories, you can compare the effects of market volatilities on Heilongjiang Publishing and Shanghai Metersbonwe 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 Heilongjiang Publishing with a short position of Shanghai Metersbonwe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heilongjiang Publishing and Shanghai Metersbonwe.
Diversification Opportunities for Heilongjiang Publishing and Shanghai Metersbonwe
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Heilongjiang and Shanghai is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Heilongjiang Publishing Media and Shanghai Metersbonwe FashionAc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Metersbonwe and Heilongjiang Publishing 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 Heilongjiang Publishing Media are associated (or correlated) with Shanghai Metersbonwe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Metersbonwe has no effect on the direction of Heilongjiang Publishing i.e., Heilongjiang Publishing and Shanghai Metersbonwe go up and down completely randomly.
Pair Corralation between Heilongjiang Publishing and Shanghai Metersbonwe
Assuming the 90 days trading horizon Heilongjiang Publishing Media is expected to generate 1.37 times more return on investment than Shanghai Metersbonwe. However, Heilongjiang Publishing is 1.37 times more volatile than Shanghai Metersbonwe FashionAccessories. It trades about 0.06 of its potential returns per unit of risk. Shanghai Metersbonwe FashionAccessories is currently generating about 0.05 per unit of risk. If you would invest 1,061 in Heilongjiang Publishing Media on September 12, 2024 and sell it today you would earn a total of 637.00 from holding Heilongjiang Publishing Media or generate 60.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heilongjiang Publishing Media vs. Shanghai Metersbonwe FashionAc
Performance |
| Timeline |
| Heilongjiang Publishing |
| Shanghai Metersbonwe |
Heilongjiang Publishing and Shanghai Metersbonwe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heilongjiang Publishing and Shanghai Metersbonwe
The main advantage of trading using opposite Heilongjiang Publishing and Shanghai Metersbonwe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heilongjiang Publishing position performs unexpectedly, Shanghai Metersbonwe 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 Metersbonwe will offset losses from the drop in Shanghai Metersbonwe's long position.The idea behind Heilongjiang Publishing Media and Shanghai Metersbonwe FashionAccessories 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.
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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