Correlation Between Shanghai CEO and City Development
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By analyzing existing cross correlation between Shanghai CEO Environmental and City Development Environment, you can compare the effects of market volatilities on Shanghai CEO and City Development 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 CEO with a short position of City Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai CEO and City Development.
Diversification Opportunities for Shanghai CEO and City Development
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and City is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai CEO Environmental and City Development Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Development Env and Shanghai CEO 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 CEO Environmental are associated (or correlated) with City Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Development Env has no effect on the direction of Shanghai CEO i.e., Shanghai CEO and City Development go up and down completely randomly.
Pair Corralation between Shanghai CEO and City Development
Assuming the 90 days trading horizon Shanghai CEO Environmental is expected to generate 22.58 times more return on investment than City Development. However, Shanghai CEO is 22.58 times more volatile than City Development Environment. It trades about 0.04 of its potential returns per unit of risk. City Development Environment is currently generating about 0.03 per unit of risk. If you would invest 2,353 in Shanghai CEO Environmental on October 29, 2024 and sell it today you would lose (1,486) from holding Shanghai CEO Environmental or give up 63.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai CEO Environmental vs. City Development Environment
Performance |
| Timeline |
| Shanghai CEO Environ |
| City Development Env |
Shanghai CEO and City Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai CEO and City Development
The main advantage of trading using opposite Shanghai CEO and City Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai CEO position performs unexpectedly, City Development 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 City Development will offset losses from the drop in City Development's long position.| Shanghai CEO vs. China Petroleum Chemical | Shanghai CEO vs. PetroChina Co Ltd | Shanghai CEO vs. China State Construction | Shanghai CEO vs. China Railway Group |
| City Development vs. China Aluminum International | City Development vs. Zhejiang Yongjin Metal | City Development vs. AVIC Fund Management | City Development vs. Cicc Fund Management |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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