Correlation Between Road Environment and Shanghai Newtouch
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By analyzing existing cross correlation between Road Environment Technology and Shanghai Newtouch Software, you can compare the effects of market volatilities on Road Environment and Shanghai Newtouch 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 Road Environment with a short position of Shanghai Newtouch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Road Environment and Shanghai Newtouch.
Diversification Opportunities for Road Environment and Shanghai Newtouch
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Road and Shanghai is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Road Environment Technology and Shanghai Newtouch Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Newtouch and Road Environment 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 Road Environment Technology are associated (or correlated) with Shanghai Newtouch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Newtouch has no effect on the direction of Road Environment i.e., Road Environment and Shanghai Newtouch go up and down completely randomly.
Pair Corralation between Road Environment and Shanghai Newtouch
Assuming the 90 days trading horizon Road Environment Technology is expected to under-perform the Shanghai Newtouch. But the stock apears to be less risky and, when comparing its historical volatility, Road Environment Technology is 1.56 times less risky than Shanghai Newtouch. The stock trades about -0.05 of its potential returns per unit of risk. The Shanghai Newtouch Software is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,089 in Shanghai Newtouch Software on October 11, 2024 and sell it today you would earn a total of 353.00 from holding Shanghai Newtouch Software or generate 32.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Road Environment Technology vs. Shanghai Newtouch Software
Performance |
| Timeline |
| Road Environment Tec |
| Shanghai Newtouch |
Road Environment and Shanghai Newtouch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Road Environment and Shanghai Newtouch
The main advantage of trading using opposite Road Environment and Shanghai Newtouch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Road Environment position performs unexpectedly, Shanghai Newtouch 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 Newtouch will offset losses from the drop in Shanghai Newtouch's long position.| Road Environment vs. Bank of Communications | Road Environment vs. Tongyu Communication | Road Environment vs. Sunwave Communications Co | Road Environment vs. Guotai Epoint Software |
| Shanghai Newtouch vs. Unisplendour Corp | Shanghai Newtouch vs. Jiangxi Hengda Hi Tech | Shanghai Newtouch vs. Shanghai Shibei Hi Tech | Shanghai Newtouch vs. Maccura Biotechnology 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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