Correlation Between Shanghai Newtouch and Chengdu Xingrong
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By analyzing existing cross correlation between Shanghai Newtouch Software and Chengdu Xingrong Investment, you can compare the effects of market volatilities on Shanghai Newtouch and Chengdu Xingrong 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 Newtouch with a short position of Chengdu Xingrong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Newtouch and Chengdu Xingrong.
Diversification Opportunities for Shanghai Newtouch and Chengdu Xingrong
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shanghai and Chengdu is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Newtouch Software and Chengdu Xingrong Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Xingrong Inv and Shanghai Newtouch 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 Newtouch Software are associated (or correlated) with Chengdu Xingrong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Xingrong Inv has no effect on the direction of Shanghai Newtouch i.e., Shanghai Newtouch and Chengdu Xingrong go up and down completely randomly.
Pair Corralation between Shanghai Newtouch and Chengdu Xingrong
Assuming the 90 days trading horizon Shanghai Newtouch Software is expected to generate 2.58 times more return on investment than Chengdu Xingrong. However, Shanghai Newtouch is 2.58 times more volatile than Chengdu Xingrong Investment. It trades about 0.03 of its potential returns per unit of risk. Chengdu Xingrong Investment is currently generating about 0.05 per unit of risk. If you would invest 1,071 in Shanghai Newtouch Software on October 16, 2024 and sell it today you would earn a total of 329.00 from holding Shanghai Newtouch Software or generate 30.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Newtouch Software vs. Chengdu Xingrong Investment
Performance |
| Timeline |
| Shanghai Newtouch |
| Chengdu Xingrong Inv |
Shanghai Newtouch and Chengdu Xingrong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Newtouch and Chengdu Xingrong
The main advantage of trading using opposite Shanghai Newtouch and Chengdu Xingrong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Newtouch position performs unexpectedly, Chengdu Xingrong 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 Chengdu Xingrong will offset losses from the drop in Chengdu Xingrong's long position.| Shanghai Newtouch vs. China World Trade | Shanghai Newtouch vs. Anyang Iron Steel | Shanghai Newtouch vs. Grandblue Environment Co | Shanghai Newtouch vs. Zhengzhou Qianweiyangchu Food |
| Chengdu Xingrong vs. Shanghai Newtouch Software | Chengdu Xingrong vs. Thunder Software Technology | Chengdu Xingrong vs. Invengo Information Technology | Chengdu Xingrong vs. China National Software |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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