Correlation Between Shanghai CEO and Zhongyin Babi
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By analyzing existing cross correlation between Shanghai CEO Environmental and Zhongyin Babi Food, you can compare the effects of market volatilities on Shanghai CEO and Zhongyin Babi 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 Zhongyin Babi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai CEO and Zhongyin Babi.
Diversification Opportunities for Shanghai CEO and Zhongyin Babi
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shanghai and Zhongyin is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai CEO Environmental and Zhongyin Babi Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongyin Babi Food 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 Zhongyin Babi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongyin Babi Food has no effect on the direction of Shanghai CEO i.e., Shanghai CEO and Zhongyin Babi go up and down completely randomly.
Pair Corralation between Shanghai CEO and Zhongyin Babi
Assuming the 90 days trading horizon Shanghai CEO Environmental is expected to generate 21.14 times more return on investment than Zhongyin Babi. However, Shanghai CEO is 21.14 times more volatile than Zhongyin Babi Food. It trades about 0.04 of its potential returns per unit of risk. Zhongyin Babi Food is currently generating about -0.05 per unit of risk. If you would invest 2,304 in Shanghai CEO Environmental on August 25, 2024 and sell it today you would lose (1,352) from holding Shanghai CEO Environmental or give up 58.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai CEO Environmental vs. Zhongyin Babi Food
Performance |
| Timeline |
| Shanghai CEO Environ |
| Zhongyin Babi Food |
Shanghai CEO and Zhongyin Babi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai CEO and Zhongyin Babi
The main advantage of trading using opposite Shanghai CEO and Zhongyin Babi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai CEO position performs unexpectedly, Zhongyin Babi 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 Zhongyin Babi will offset losses from the drop in Zhongyin Babi's long position.| Shanghai CEO vs. Zhongyin Babi Food | Shanghai CEO vs. New Hope Dairy | Shanghai CEO vs. Nexchip Semiconductor Corp | Shanghai CEO vs. Eastroc Beverage Group |
| Zhongyin Babi vs. China Petroleum Chemical | Zhongyin Babi vs. PetroChina Co Ltd | Zhongyin Babi vs. China State Construction | Zhongyin Babi vs. China Railway Group |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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