Correlation Between GreenTech Environmental and Shanghai Metersbonwe
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By analyzing existing cross correlation between GreenTech Environmental Co and Shanghai Metersbonwe FashionAccessories, you can compare the effects of market volatilities on GreenTech Environmental and Shanghai Metersbonwe 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 GreenTech Environmental with a short position of Shanghai Metersbonwe. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenTech Environmental and Shanghai Metersbonwe.
Diversification Opportunities for GreenTech Environmental and Shanghai Metersbonwe
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GreenTech and Shanghai is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding GreenTech Environmental Co and Shanghai Metersbonwe FashionAc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Metersbonwe and GreenTech Environmental 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 GreenTech Environmental Co are associated (or correlated) with Shanghai Metersbonwe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Metersbonwe has no effect on the direction of GreenTech Environmental i.e., GreenTech Environmental and Shanghai Metersbonwe go up and down completely randomly.
Pair Corralation between GreenTech Environmental and Shanghai Metersbonwe
Assuming the 90 days trading horizon GreenTech Environmental is expected to generate 24.62 times less return on investment than Shanghai Metersbonwe. In addition to that, GreenTech Environmental is 1.0 times more volatile than Shanghai Metersbonwe FashionAccessories. It trades about 0.0 of its total potential returns per unit of risk. Shanghai Metersbonwe FashionAccessories is currently generating about 0.05 per unit of volatility. If you would invest 186.00 in Shanghai Metersbonwe FashionAccessories on September 4, 2024 and sell it today you would earn a total of 58.00 from holding Shanghai Metersbonwe FashionAccessories or generate 31.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenTech Environmental Co vs. Shanghai Metersbonwe FashionAc
Performance |
| Timeline |
| GreenTech Environmental |
| Shanghai Metersbonwe |
GreenTech Environmental and Shanghai Metersbonwe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenTech Environmental and Shanghai Metersbonwe
The main advantage of trading using opposite GreenTech Environmental and Shanghai Metersbonwe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenTech Environmental position performs unexpectedly, Shanghai Metersbonwe 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 Metersbonwe will offset losses from the drop in Shanghai Metersbonwe's long position.The idea behind GreenTech Environmental Co and Shanghai Metersbonwe FashionAccessories 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.
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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