Correlation Between Shanghai Industrial and Halma Plc
Can any of the company-specific risk be diversified away by investing in both Shanghai Industrial and Halma Plc 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 Industrial and Halma Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shanghai Industrial Holdings and Halma plc, you can compare the effects of market volatilities on Shanghai Industrial and Halma Plc 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 Industrial with a short position of Halma Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Industrial and Halma Plc.
Diversification Opportunities for Shanghai Industrial and Halma Plc
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shanghai and Halma is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Industrial Holdings and Halma plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halma plc and Shanghai Industrial 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 Industrial Holdings are associated (or correlated) with Halma Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halma plc has no effect on the direction of Shanghai Industrial i.e., Shanghai Industrial and Halma Plc go up and down completely randomly.
Pair Corralation between Shanghai Industrial and Halma Plc
Assuming the 90 days horizon Shanghai Industrial Holdings is expected to under-perform the Halma Plc. In addition to that, Shanghai Industrial is 1.5 times more volatile than Halma plc. It trades about 0.0 of its total potential returns per unit of risk. Halma plc is currently generating about 0.04 per unit of volatility. If you would invest 2,664 in Halma plc on November 7, 2024 and sell it today you would earn a total of 1,075 from holding Halma plc or generate 40.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 41.7% |
| Values | Daily Returns |
Shanghai Industrial Holdings vs. Halma plc
Performance |
| Timeline |
| Shanghai Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Halma plc |
Shanghai Industrial and Halma Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Industrial and Halma Plc
The main advantage of trading using opposite Shanghai Industrial and Halma Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Industrial position performs unexpectedly, Halma Plc 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 Halma Plc will offset losses from the drop in Halma Plc's long position.| Shanghai Industrial vs. Teijin | Shanghai Industrial vs. Ayala Corp ADR | Shanghai Industrial vs. CK Hutchison Holdings | Shanghai Industrial vs. 1847 Holdings LLC |
| Halma Plc vs. Griffon | Halma Plc vs. Brookfield Business Partners | Halma Plc vs. MDU Resources Group | Halma Plc vs. Matthews International |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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