Correlation Between Dazhong Transportation and Shanghai Broadband
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By analyzing existing cross correlation between Dazhong Transportation Group and Shanghai Broadband Technology, you can compare the effects of market volatilities on Dazhong Transportation and Shanghai Broadband 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 Dazhong Transportation with a short position of Shanghai Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dazhong Transportation and Shanghai Broadband.
Diversification Opportunities for Dazhong Transportation and Shanghai Broadband
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dazhong and Shanghai is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Dazhong Transportation Group and Shanghai Broadband Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Broadband and Dazhong Transportation 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 Dazhong Transportation Group are associated (or correlated) with Shanghai Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Broadband has no effect on the direction of Dazhong Transportation i.e., Dazhong Transportation and Shanghai Broadband go up and down completely randomly.
Pair Corralation between Dazhong Transportation and Shanghai Broadband
Assuming the 90 days trading horizon Dazhong Transportation is expected to generate 28.48 times less return on investment than Shanghai Broadband. In addition to that, Dazhong Transportation is 1.05 times more volatile than Shanghai Broadband Technology. It trades about 0.01 of its total potential returns per unit of risk. Shanghai Broadband Technology is currently generating about 0.38 per unit of volatility. If you would invest 328.00 in Shanghai Broadband Technology on August 29, 2024 and sell it today you would earn a total of 76.00 from holding Shanghai Broadband Technology or generate 23.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dazhong Transportation Group vs. Shanghai Broadband Technology
Performance |
| Timeline |
| Dazhong Transportation |
| Shanghai Broadband |
Dazhong Transportation and Shanghai Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dazhong Transportation and Shanghai Broadband
The main advantage of trading using opposite Dazhong Transportation and Shanghai Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dazhong Transportation position performs unexpectedly, Shanghai Broadband 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 Broadband will offset losses from the drop in Shanghai Broadband's long position.| Dazhong Transportation vs. Uxi Unicomp Technology | Dazhong Transportation vs. Jiaozuo Wanfang Aluminum | Dazhong Transportation vs. CITIC Metal Co | Dazhong Transportation vs. Linewell Software Co |
| Shanghai Broadband vs. Iat Automobile Technology | Shanghai Broadband vs. Haima Automobile Group | Shanghai Broadband vs. Zhongtong Guomai Communication | Shanghai Broadband vs. Anhui Transport Consulting |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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