Correlation Between Berli Jucker and Shanghai Industrial
Can any of the company-specific risk be diversified away by investing in both Berli Jucker and Shanghai Industrial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Berli Jucker and Shanghai Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berli Jucker PCL and Shanghai Industrial Holdings, you can compare the effects of market volatilities on Berli Jucker and Shanghai Industrial 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 Berli Jucker with a short position of Shanghai Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berli Jucker and Shanghai Industrial.
Diversification Opportunities for Berli Jucker and Shanghai Industrial
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Berli and Shanghai is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Berli Jucker PCL and Shanghai Industrial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Industrial and Berli Jucker 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 Berli Jucker PCL are associated (or correlated) with Shanghai Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Industrial has no effect on the direction of Berli Jucker i.e., Berli Jucker and Shanghai Industrial go up and down completely randomly.
Pair Corralation between Berli Jucker and Shanghai Industrial
Assuming the 90 days horizon Berli Jucker PCL is expected to under-perform the Shanghai Industrial. But the pink sheet apears to be less risky and, when comparing its historical volatility, Berli Jucker PCL is 2.21 times less risky than Shanghai Industrial. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Shanghai Industrial Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 124.00 in Shanghai Industrial Holdings on September 19, 2024 and sell it today you would lose (9.00) from holding Shanghai Industrial Holdings or give up 7.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 56.25% |
| Values | Daily Returns |
Berli Jucker PCL vs. Shanghai Industrial Holdings
Performance |
| Timeline |
| Berli Jucker PCL |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shanghai Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Berli Jucker and Shanghai Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berli Jucker and Shanghai Industrial
The main advantage of trading using opposite Berli Jucker and Shanghai Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berli Jucker position performs unexpectedly, Shanghai Industrial 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 Industrial will offset losses from the drop in Shanghai Industrial's long position.| Berli Jucker vs. Teijin | Berli Jucker vs. Ayala Corp ADR | Berli Jucker vs. CK Hutchison Holdings | Berli Jucker vs. 1847 Holdings LLC |
| Shanghai Industrial vs. Teijin | Shanghai Industrial vs. Ayala Corp ADR | Shanghai Industrial vs. CK Hutchison Holdings | Shanghai Industrial vs. 1847 Holdings LLC |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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