Correlation Between Shanghai OPM and Shenzhen Agricultural
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By analyzing existing cross correlation between Shanghai OPM Biosciences and Shenzhen Agricultural Products, you can compare the effects of market volatilities on Shanghai OPM and Shenzhen Agricultural 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 OPM with a short position of Shenzhen Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai OPM and Shenzhen Agricultural.
Diversification Opportunities for Shanghai OPM and Shenzhen Agricultural
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Shenzhen is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai OPM Biosciences and Shenzhen Agricultural Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Agricultural and Shanghai OPM 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 OPM Biosciences are associated (or correlated) with Shenzhen Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Agricultural has no effect on the direction of Shanghai OPM i.e., Shanghai OPM and Shenzhen Agricultural go up and down completely randomly.
Pair Corralation between Shanghai OPM and Shenzhen Agricultural
Assuming the 90 days trading horizon Shanghai OPM Biosciences is expected to generate 1.35 times more return on investment than Shenzhen Agricultural. However, Shanghai OPM is 1.35 times more volatile than Shenzhen Agricultural Products. It trades about -0.02 of its potential returns per unit of risk. Shenzhen Agricultural Products is currently generating about -0.21 per unit of risk. If you would invest 3,971 in Shanghai OPM Biosciences on October 20, 2024 and sell it today you would lose (55.00) from holding Shanghai OPM Biosciences or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shanghai OPM Biosciences vs. Shenzhen Agricultural Products
Performance |
| Timeline |
| Shanghai OPM Biosciences |
| Shenzhen Agricultural |
Shanghai OPM and Shenzhen Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai OPM and Shenzhen Agricultural
The main advantage of trading using opposite Shanghai OPM and Shenzhen Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai OPM position performs unexpectedly, Shenzhen Agricultural 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 Shenzhen Agricultural will offset losses from the drop in Shenzhen Agricultural's long position.| Shanghai OPM vs. Yili Chuanning Biotechnology | Shanghai OPM vs. Jiaozuo Wanfang Aluminum | Shanghai OPM vs. Rising Nonferrous Metals | Shanghai OPM vs. Tongling Nonferrous Metals |
| Shenzhen Agricultural vs. Mingchen Health Co | Shenzhen Agricultural vs. Shenzhen Bioeasy Biotechnology | Shenzhen Agricultural vs. Goodwill E Health | Shenzhen Agricultural vs. Hangzhou Minsheng Healthcare |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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