Correlation Between Shanghai Newtouch and Chengdu Xinzhu
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By analyzing existing cross correlation between Shanghai Newtouch Software and Chengdu Xinzhu RoadBridge, you can compare the effects of market volatilities on Shanghai Newtouch and Chengdu Xinzhu 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 Xinzhu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Newtouch and Chengdu Xinzhu.
Diversification Opportunities for Shanghai Newtouch and Chengdu Xinzhu
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Chengdu is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Newtouch Software and Chengdu Xinzhu RoadBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Xinzhu RoadBridge 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 Xinzhu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Xinzhu RoadBridge has no effect on the direction of Shanghai Newtouch i.e., Shanghai Newtouch and Chengdu Xinzhu go up and down completely randomly.
Pair Corralation between Shanghai Newtouch and Chengdu Xinzhu
Assuming the 90 days trading horizon Shanghai Newtouch Software is expected to generate 1.55 times more return on investment than Chengdu Xinzhu. However, Shanghai Newtouch is 1.55 times more volatile than Chengdu Xinzhu RoadBridge. It trades about 0.03 of its potential returns per unit of risk. Chengdu Xinzhu RoadBridge is currently generating about 0.02 per unit of risk. If you would invest 1,089 in Shanghai Newtouch Software on October 11, 2024 and sell it today you would earn a total of 353.00 from holding Shanghai Newtouch Software or generate 32.42% 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. Chengdu Xinzhu RoadBridge
Performance |
| Timeline |
| Shanghai Newtouch |
| Chengdu Xinzhu RoadBridge |
Shanghai Newtouch and Chengdu Xinzhu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Newtouch and Chengdu Xinzhu
The main advantage of trading using opposite Shanghai Newtouch and Chengdu Xinzhu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Newtouch position performs unexpectedly, Chengdu Xinzhu 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 Xinzhu will offset losses from the drop in Chengdu Xinzhu's long position.| Shanghai Newtouch vs. Unisplendour Corp | Shanghai Newtouch vs. Jiangxi Hengda Hi Tech | Shanghai Newtouch vs. Shanghai Shibei Hi Tech | Shanghai Newtouch vs. Maccura Biotechnology Co |
| Chengdu Xinzhu vs. Inspur Software Co | Chengdu Xinzhu vs. Thunder Software Technology | Chengdu Xinzhu vs. Shanghai Newtouch Software | Chengdu Xinzhu vs. Bingo Software 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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