Correlation Between Shanghai Sanyou and China Longyuan
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By analyzing existing cross correlation between Shanghai Sanyou Medical and China Longyuan Power, you can compare the effects of market volatilities on Shanghai Sanyou and China Longyuan 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 Sanyou with a short position of China Longyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Sanyou and China Longyuan.
Diversification Opportunities for Shanghai Sanyou and China Longyuan
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and China is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Sanyou Medical and China Longyuan Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Longyuan Power and Shanghai Sanyou 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 Sanyou Medical are associated (or correlated) with China Longyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Longyuan Power has no effect on the direction of Shanghai Sanyou i.e., Shanghai Sanyou and China Longyuan go up and down completely randomly.
Pair Corralation between Shanghai Sanyou and China Longyuan
Assuming the 90 days trading horizon Shanghai Sanyou Medical is expected to under-perform the China Longyuan. In addition to that, Shanghai Sanyou is 2.51 times more volatile than China Longyuan Power. It trades about -0.13 of its total potential returns per unit of risk. China Longyuan Power is currently generating about -0.01 per unit of volatility. If you would invest 1,505 in China Longyuan Power on November 2, 2024 and sell it today you would lose (5.00) from holding China Longyuan Power or give up 0.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Sanyou Medical vs. China Longyuan Power
Performance |
| Timeline |
| Shanghai Sanyou Medical |
| China Longyuan Power |
Shanghai Sanyou and China Longyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Sanyou and China Longyuan
The main advantage of trading using opposite Shanghai Sanyou and China Longyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Sanyou position performs unexpectedly, China Longyuan 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 Longyuan will offset losses from the drop in China Longyuan's long position.| Shanghai Sanyou vs. YiDong Electronics Technology | Shanghai Sanyou vs. Anhui Tongguan Copper | Shanghai Sanyou vs. Suzhou Douson Drilling | Shanghai Sanyou vs. Zhejiang Yongjin Metal |
| China Longyuan vs. Ningbo Fangzheng Automobile | China Longyuan vs. CSSC Offshore Marine | China Longyuan vs. Anhui Deli Household | China Longyuan vs. Beijing Bewinner Communications |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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