Correlation Between Shanghai Sanyou and Sichuan Hebang
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By analyzing existing cross correlation between Shanghai Sanyou Medical and Sichuan Hebang Biotechnology, you can compare the effects of market volatilities on Shanghai Sanyou and Sichuan Hebang 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 Sichuan Hebang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Sanyou and Sichuan Hebang.
Diversification Opportunities for Shanghai Sanyou and Sichuan Hebang
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Sichuan is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Sanyou Medical and Sichuan Hebang Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Hebang Biote 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 Sichuan Hebang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Hebang Biote has no effect on the direction of Shanghai Sanyou i.e., Shanghai Sanyou and Sichuan Hebang go up and down completely randomly.
Pair Corralation between Shanghai Sanyou and Sichuan Hebang
Assuming the 90 days trading horizon Shanghai Sanyou Medical is expected to generate 1.87 times more return on investment than Sichuan Hebang. However, Shanghai Sanyou is 1.87 times more volatile than Sichuan Hebang Biotechnology. It trades about -0.04 of its potential returns per unit of risk. Sichuan Hebang Biotechnology is currently generating about -0.44 per unit of risk. If you would invest 2,139 in Shanghai Sanyou Medical on October 17, 2024 and sell it today you would lose (85.00) from holding Shanghai Sanyou Medical or give up 3.97% 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. Sichuan Hebang Biotechnology
Performance |
| Timeline |
| Shanghai Sanyou Medical |
| Sichuan Hebang Biote |
Shanghai Sanyou and Sichuan Hebang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Sanyou and Sichuan Hebang
The main advantage of trading using opposite Shanghai Sanyou and Sichuan Hebang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Sanyou position performs unexpectedly, Sichuan Hebang 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 Sichuan Hebang will offset losses from the drop in Sichuan Hebang's long position.| Shanghai Sanyou vs. Iat Automobile Technology | Shanghai Sanyou vs. Cultural Investment Holdings | Shanghai Sanyou vs. Metro Investment Development | Shanghai Sanyou vs. Sinomach Automobile Co |
| Sichuan Hebang vs. Xiamen Jihong Package | Sichuan Hebang vs. Xiwang Foodstuffs Co | Sichuan Hebang vs. Jinlong Machinery Electronic | Sichuan Hebang vs. Anji Foodstuff Co |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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