Correlation Between Shanghai Lingyun and Xinjiang Tianshun
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By analyzing existing cross correlation between Shanghai Lingyun Industries and Xinjiang Tianshun Supply, you can compare the effects of market volatilities on Shanghai Lingyun and Xinjiang Tianshun 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 Lingyun with a short position of Xinjiang Tianshun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Lingyun and Xinjiang Tianshun.
Diversification Opportunities for Shanghai Lingyun and Xinjiang Tianshun
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shanghai and Xinjiang is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Lingyun Industries and Xinjiang Tianshun Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Tianshun Supply and Shanghai Lingyun 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 Lingyun Industries are associated (or correlated) with Xinjiang Tianshun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Tianshun Supply has no effect on the direction of Shanghai Lingyun i.e., Shanghai Lingyun and Xinjiang Tianshun go up and down completely randomly.
Pair Corralation between Shanghai Lingyun and Xinjiang Tianshun
Assuming the 90 days trading horizon Shanghai Lingyun Industries is expected to generate 1.36 times more return on investment than Xinjiang Tianshun. However, Shanghai Lingyun is 1.36 times more volatile than Xinjiang Tianshun Supply. It trades about 0.16 of its potential returns per unit of risk. Xinjiang Tianshun Supply is currently generating about 0.2 per unit of risk. If you would invest 27.00 in Shanghai Lingyun Industries on September 12, 2024 and sell it today you would earn a total of 12.00 from holding Shanghai Lingyun Industries or generate 44.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Lingyun Industries vs. Xinjiang Tianshun Supply
Performance |
| Timeline |
| Shanghai Lingyun Ind |
| Xinjiang Tianshun Supply |
Shanghai Lingyun and Xinjiang Tianshun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Lingyun and Xinjiang Tianshun
The main advantage of trading using opposite Shanghai Lingyun and Xinjiang Tianshun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Lingyun position performs unexpectedly, Xinjiang Tianshun 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 Xinjiang Tianshun will offset losses from the drop in Xinjiang Tianshun's long position.| Shanghai Lingyun vs. State Grid InformationCommunication | Shanghai Lingyun vs. Innovative Medical Management | Shanghai Lingyun vs. Songz Automobile Air | Shanghai Lingyun vs. Haima Automobile Group |
| Xinjiang Tianshun vs. Beijing SPC Environment | Xinjiang Tianshun vs. Hang Xiao Steel | Xinjiang Tianshun vs. King Strong New Material | Xinjiang Tianshun vs. Tianjin Capital Environmental |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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