Correlation Between Touchstone International and Shanghai Construction
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By analyzing existing cross correlation between Touchstone International Medical and Shanghai Construction Group, you can compare the effects of market volatilities on Touchstone International and Shanghai Construction 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 Touchstone International with a short position of Shanghai Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone International and Shanghai Construction.
Diversification Opportunities for Touchstone International and Shanghai Construction
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Touchstone and Shanghai is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone International Medic and Shanghai Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Construction and Touchstone International 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 Touchstone International Medical are associated (or correlated) with Shanghai Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Construction has no effect on the direction of Touchstone International i.e., Touchstone International and Shanghai Construction go up and down completely randomly.
Pair Corralation between Touchstone International and Shanghai Construction
Assuming the 90 days trading horizon Touchstone International Medical is expected to generate 1.64 times more return on investment than Shanghai Construction. However, Touchstone International is 1.64 times more volatile than Shanghai Construction Group. It trades about 0.37 of its potential returns per unit of risk. Shanghai Construction Group is currently generating about -0.08 per unit of risk. If you would invest 1,697 in Touchstone International Medical on November 7, 2024 and sell it today you would earn a total of 192.00 from holding Touchstone International Medical or generate 11.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone International Medic vs. Shanghai Construction Group
Performance |
| Timeline |
| Touchstone International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Shanghai Construction |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Touchstone International and Shanghai Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone International and Shanghai Construction
The main advantage of trading using opposite Touchstone International and Shanghai Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone International position performs unexpectedly, Shanghai Construction 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 Construction will offset losses from the drop in Shanghai Construction's long position.The idea behind Touchstone International Medical and Shanghai Construction Group 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.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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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