Correlation Between Shanghai Pharmaceuticals and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Shanghai Pharmaceuticals and Superior Plus 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 Shanghai Pharmaceuticals and Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shanghai Pharmaceuticals Holding and Superior Plus Corp, you can compare the effects of market volatilities on Shanghai Pharmaceuticals and Superior Plus 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 Pharmaceuticals with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Pharmaceuticals and Superior Plus.
Diversification Opportunities for Shanghai Pharmaceuticals and Superior Plus
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shanghai and Superior is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Pharmaceuticals Holdi and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp and Shanghai Pharmaceuticals 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 Pharmaceuticals Holding are associated (or correlated) with Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Shanghai Pharmaceuticals i.e., Shanghai Pharmaceuticals and Superior Plus go up and down completely randomly.
Pair Corralation between Shanghai Pharmaceuticals and Superior Plus
Assuming the 90 days horizon Shanghai Pharmaceuticals Holding is expected to generate 0.43 times more return on investment than Superior Plus. However, Shanghai Pharmaceuticals Holding is 2.35 times less risky than Superior Plus. It trades about 0.11 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.01 per unit of risk. If you would invest 142.00 in Shanghai Pharmaceuticals Holding on August 28, 2024 and sell it today you would earn a total of 7.00 from holding Shanghai Pharmaceuticals Holding or generate 4.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shanghai Pharmaceuticals Holdi vs. Superior Plus Corp
Performance |
| Timeline |
| Shanghai Pharmaceuticals |
| Superior Plus Corp |
Shanghai Pharmaceuticals and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Pharmaceuticals and Superior Plus
The main advantage of trading using opposite Shanghai Pharmaceuticals and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Pharmaceuticals position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| Shanghai Pharmaceuticals vs. Westinghouse Air Brake | Shanghai Pharmaceuticals vs. GEELY AUTOMOBILE | Shanghai Pharmaceuticals vs. Fair Isaac Corp | Shanghai Pharmaceuticals vs. Commercial Vehicle Group |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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