Correlation Between Shanghai V-Test and Caihong Display
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By analyzing existing cross correlation between Shanghai V Test Semiconductor and Caihong Display Devices, you can compare the effects of market volatilities on Shanghai V-Test and Caihong Display 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 V-Test with a short position of Caihong Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai V-Test and Caihong Display.
Diversification Opportunities for Shanghai V-Test and Caihong Display
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shanghai and Caihong is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai V Test Semiconductor and Caihong Display Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caihong Display Devices and Shanghai V-Test 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 V Test Semiconductor are associated (or correlated) with Caihong Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caihong Display Devices has no effect on the direction of Shanghai V-Test i.e., Shanghai V-Test and Caihong Display go up and down completely randomly.
Pair Corralation between Shanghai V-Test and Caihong Display
Assuming the 90 days trading horizon Shanghai V Test Semiconductor is expected to generate 1.7 times more return on investment than Caihong Display. However, Shanghai V-Test is 1.7 times more volatile than Caihong Display Devices. It trades about 0.13 of its potential returns per unit of risk. Caihong Display Devices is currently generating about 0.11 per unit of risk. If you would invest 3,923 in Shanghai V Test Semiconductor on November 7, 2024 and sell it today you would earn a total of 3,167 from holding Shanghai V Test Semiconductor or generate 80.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai V Test Semiconductor vs. Caihong Display Devices
Performance |
| Timeline |
| Shanghai V Test |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Caihong Display Devices |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Shanghai V-Test and Caihong Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai V-Test and Caihong Display
The main advantage of trading using opposite Shanghai V-Test and Caihong Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai V-Test position performs unexpectedly, Caihong Display 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 Caihong Display will offset losses from the drop in Caihong Display's long position.The idea behind Shanghai V Test Semiconductor and Caihong Display Devices pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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