Correlation Between Suzhou Novoprotein and Shanghai Electric
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By analyzing existing cross correlation between Suzhou Novoprotein Scientific and Shanghai Electric Group, you can compare the effects of market volatilities on Suzhou Novoprotein and Shanghai Electric 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 Suzhou Novoprotein with a short position of Shanghai Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suzhou Novoprotein and Shanghai Electric.
Diversification Opportunities for Suzhou Novoprotein and Shanghai Electric
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Suzhou and Shanghai is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Suzhou Novoprotein Scientific and Shanghai Electric Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Electric and Suzhou Novoprotein 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 Suzhou Novoprotein Scientific are associated (or correlated) with Shanghai Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Electric has no effect on the direction of Suzhou Novoprotein i.e., Suzhou Novoprotein and Shanghai Electric go up and down completely randomly.
Pair Corralation between Suzhou Novoprotein and Shanghai Electric
Assuming the 90 days trading horizon Suzhou Novoprotein is expected to generate 3.97 times less return on investment than Shanghai Electric. But when comparing it to its historical volatility, Suzhou Novoprotein Scientific is 1.88 times less risky than Shanghai Electric. It trades about 0.14 of its potential returns per unit of risk. Shanghai Electric Group is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 378.00 in Shanghai Electric Group on September 12, 2024 and sell it today you would earn a total of 533.00 from holding Shanghai Electric Group or generate 141.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suzhou Novoprotein Scientific vs. Shanghai Electric Group
Performance |
| Timeline |
| Suzhou Novoprotein |
| Shanghai Electric |
Suzhou Novoprotein and Shanghai Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suzhou Novoprotein and Shanghai Electric
The main advantage of trading using opposite Suzhou Novoprotein and Shanghai Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suzhou Novoprotein position performs unexpectedly, Shanghai Electric 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 Electric will offset losses from the drop in Shanghai Electric's long position.| Suzhou Novoprotein vs. Shanghai Shuixing Home | Suzhou Novoprotein vs. Markor International Home | Suzhou Novoprotein vs. Qumei Furniture Group | Suzhou Novoprotein vs. Xinhua Winshare Publishing |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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