Correlation Between CareRay Digital and Shanghai Construction
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By analyzing existing cross correlation between CareRay Digital Medical and Shanghai Construction Group, you can compare the effects of market volatilities on CareRay Digital and Shanghai 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 CareRay Digital with a short position of Shanghai Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of CareRay Digital and Shanghai Construction.
Diversification Opportunities for CareRay Digital and Shanghai Construction
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CareRay and Shanghai is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding CareRay Digital Medical and Shanghai Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Construction and CareRay Digital 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 CareRay Digital Medical are associated (or correlated) with Shanghai Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Construction has no effect on the direction of CareRay Digital i.e., CareRay Digital and Shanghai Construction go up and down completely randomly.
Pair Corralation between CareRay Digital and Shanghai Construction
Assuming the 90 days trading horizon CareRay Digital Medical is expected to generate 1.7 times more return on investment than Shanghai Construction. However, CareRay Digital is 1.7 times more volatile than Shanghai Construction Group. It trades about 0.33 of its potential returns per unit of risk. Shanghai Construction Group is currently generating about -0.08 per unit of risk. If you would invest 1,287 in CareRay Digital Medical on November 7, 2024 and sell it today you would earn a total of 135.00 from holding CareRay Digital Medical or generate 10.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CareRay Digital Medical vs. Shanghai Construction Group
Performance |
| Timeline |
| CareRay Digital Medical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shanghai Construction |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CareRay Digital and Shanghai Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CareRay Digital and Shanghai Construction
The main advantage of trading using opposite CareRay Digital and Shanghai Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CareRay Digital position performs unexpectedly, Shanghai 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 Shanghai Construction will offset losses from the drop in Shanghai Construction's long position.The idea behind CareRay Digital Medical and Shanghai Construction Group 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.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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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