Correlation Between VARIOUS EATERIES and Sinopec Shanghai
Can any of the company-specific risk be diversified away by investing in both VARIOUS EATERIES and Sinopec Shanghai at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining VARIOUS EATERIES and Sinopec Shanghai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VARIOUS EATERIES LS and Sinopec Shanghai Petrochemical, you can compare the effects of market volatilities on VARIOUS EATERIES and Sinopec Shanghai 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 VARIOUS EATERIES with a short position of Sinopec Shanghai. Check out your portfolio center. Please also check ongoing floating volatility patterns of VARIOUS EATERIES and Sinopec Shanghai.
Diversification Opportunities for VARIOUS EATERIES and Sinopec Shanghai
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VARIOUS and Sinopec is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding VARIOUS EATERIES LS and Sinopec Shanghai Petrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopec Shanghai Pet and VARIOUS EATERIES 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 VARIOUS EATERIES LS are associated (or correlated) with Sinopec Shanghai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopec Shanghai Pet has no effect on the direction of VARIOUS EATERIES i.e., VARIOUS EATERIES and Sinopec Shanghai go up and down completely randomly.
Pair Corralation between VARIOUS EATERIES and Sinopec Shanghai
Assuming the 90 days horizon VARIOUS EATERIES LS is expected to generate 0.31 times more return on investment than Sinopec Shanghai. However, VARIOUS EATERIES LS is 3.24 times less risky than Sinopec Shanghai. It trades about -0.22 of its potential returns per unit of risk. Sinopec Shanghai Petrochemical is currently generating about -0.07 per unit of risk. If you would invest 19.00 in VARIOUS EATERIES LS on November 7, 2024 and sell it today you would lose (1.00) from holding VARIOUS EATERIES LS or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
VARIOUS EATERIES LS vs. Sinopec Shanghai Petrochemical
Performance |
| Timeline |
| VARIOUS EATERIES |
| Sinopec Shanghai Pet |
VARIOUS EATERIES and Sinopec Shanghai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VARIOUS EATERIES and Sinopec Shanghai
The main advantage of trading using opposite VARIOUS EATERIES and Sinopec Shanghai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VARIOUS EATERIES position performs unexpectedly, Sinopec Shanghai 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 Sinopec Shanghai will offset losses from the drop in Sinopec Shanghai's long position.| VARIOUS EATERIES vs. McDonalds | VARIOUS EATERIES vs. Starbucks | VARIOUS EATERIES vs. Starbucks | VARIOUS EATERIES vs. Chipotle Mexican Grill |
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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 Stocks Directory module to find actively traded stocks across global markets.
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