Correlation Between 1847 Holdings and Shanghai Industrial
Can any of the company-specific risk be diversified away by investing in both 1847 Holdings 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 1847 Holdings and Shanghai Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1847 Holdings LLC and Shanghai Industrial Holdings, you can compare the effects of market volatilities on 1847 Holdings 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 1847 Holdings with a short position of Shanghai Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1847 Holdings and Shanghai Industrial.
Diversification Opportunities for 1847 Holdings and Shanghai Industrial
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 1847 and Shanghai is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding 1847 Holdings LLC and Shanghai Industrial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Industrial and 1847 Holdings 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 1847 Holdings LLC 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 1847 Holdings i.e., 1847 Holdings and Shanghai Industrial go up and down completely randomly.
Pair Corralation between 1847 Holdings and Shanghai Industrial
Given the investment horizon of 90 days 1847 Holdings LLC is expected to generate 12.99 times more return on investment than Shanghai Industrial. However, 1847 Holdings is 12.99 times more volatile than Shanghai Industrial Holdings. It trades about 0.01 of its potential returns per unit of risk. Shanghai Industrial Holdings is currently generating about 0.01 per unit of risk. If you would invest 138,840 in 1847 Holdings LLC on September 20, 2024 and sell it today you would lose (138,818) from holding 1847 Holdings LLC or give up 99.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 47.07% |
| Values | Daily Returns |
1847 Holdings LLC vs. Shanghai Industrial Holdings
Performance |
| Timeline |
| 1847 Holdings LLC |
| Shanghai Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
1847 Holdings and Shanghai Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1847 Holdings and Shanghai Industrial
The main advantage of trading using opposite 1847 Holdings and Shanghai Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1847 Holdings 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.| 1847 Holdings vs. Steel Partners Holdings | 1847 Holdings vs. Brookfield Business Partners | 1847 Holdings vs. Griffon | 1847 Holdings vs. Tejon Ranch Co |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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