Correlation Between Shanghai Newtouch and Road Environment
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By analyzing existing cross correlation between Shanghai Newtouch Software and Road Environment Technology, you can compare the effects of market volatilities on Shanghai Newtouch and Road Environment 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 Road Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Newtouch and Road Environment.
Diversification Opportunities for Shanghai Newtouch and Road Environment
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Road is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Newtouch Software and Road Environment Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Road Environment Tec 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 Road Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Road Environment Tec has no effect on the direction of Shanghai Newtouch i.e., Shanghai Newtouch and Road Environment go up and down completely randomly.
Pair Corralation between Shanghai Newtouch and Road Environment
Assuming the 90 days trading horizon Shanghai Newtouch Software is expected to under-perform the Road Environment. In addition to that, Shanghai Newtouch is 1.64 times more volatile than Road Environment Technology. It trades about -0.06 of its total potential returns per unit of risk. Road Environment Technology is currently generating about -0.08 per unit of volatility. If you would invest 1,475 in Road Environment Technology on October 11, 2024 and sell it today you would lose (167.00) from holding Road Environment Technology or give up 11.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Newtouch Software vs. Road Environment Technology
Performance |
| Timeline |
| Shanghai Newtouch |
| Road Environment Tec |
Shanghai Newtouch and Road Environment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Newtouch and Road Environment
The main advantage of trading using opposite Shanghai Newtouch and Road Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Newtouch position performs unexpectedly, Road Environment 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 Road Environment will offset losses from the drop in Road Environment'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 |
| Road Environment vs. Bank of Communications | Road Environment vs. Tongyu Communication | Road Environment vs. Sunwave Communications Co | Road Environment vs. Guotai Epoint 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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