Correlation Between Shanghai Newtouch and Shantui Construction
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By analyzing existing cross correlation between Shanghai Newtouch Software and Shantui Construction Machinery, you can compare the effects of market volatilities on Shanghai Newtouch and Shantui Construction 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 Shantui Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Newtouch and Shantui Construction.
Diversification Opportunities for Shanghai Newtouch and Shantui Construction
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Shantui is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Newtouch Software and Shantui Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shantui Construction 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 Shantui Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shantui Construction has no effect on the direction of Shanghai Newtouch i.e., Shanghai Newtouch and Shantui Construction go up and down completely randomly.
Pair Corralation between Shanghai Newtouch and Shantui Construction
Assuming the 90 days trading horizon Shanghai Newtouch is expected to generate 9.06 times less return on investment than Shantui Construction. In addition to that, Shanghai Newtouch is 1.43 times more volatile than Shantui Construction Machinery. It trades about 0.01 of its total potential returns per unit of risk. Shantui Construction Machinery is currently generating about 0.12 per unit of volatility. If you would invest 451.00 in Shantui Construction Machinery on October 18, 2024 and sell it today you would earn a total of 540.00 from holding Shantui Construction Machinery or generate 119.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Newtouch Software vs. Shantui Construction Machinery
Performance |
| Timeline |
| Shanghai Newtouch |
| Shantui Construction |
Shanghai Newtouch and Shantui Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Newtouch and Shantui Construction
The main advantage of trading using opposite Shanghai Newtouch and Shantui Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Newtouch position performs unexpectedly, Shantui Construction 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 Shantui Construction will offset losses from the drop in Shantui Construction's long position.| Shanghai Newtouch vs. Heilongjiang Transport Development | Shanghai Newtouch vs. Hefei Metalforming Mach | Shanghai Newtouch vs. CITIC Metal Co | Shanghai Newtouch vs. Qingdao Foods Co |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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