Correlation Between Sinopec Shanghai and TELE2 -B-
Can any of the company-specific risk be diversified away by investing in both Sinopec Shanghai and TELE2 -B- 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 Sinopec Shanghai and TELE2 -B- into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinopec Shanghai Petrochemical and TELE2 B , you can compare the effects of market volatilities on Sinopec Shanghai and TELE2 -B- 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 Sinopec Shanghai with a short position of TELE2 -B-. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinopec Shanghai and TELE2 -B-.
Diversification Opportunities for Sinopec Shanghai and TELE2 -B-
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sinopec and TELE2 is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sinopec Shanghai Petrochemical and TELE2 B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELE2 -B- and Sinopec Shanghai 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 Sinopec Shanghai Petrochemical are associated (or correlated) with TELE2 -B-. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELE2 -B- has no effect on the direction of Sinopec Shanghai i.e., Sinopec Shanghai and TELE2 -B- go up and down completely randomly.
Pair Corralation between Sinopec Shanghai and TELE2 -B-
Assuming the 90 days trading horizon Sinopec Shanghai Petrochemical is expected to generate 3.54 times more return on investment than TELE2 -B-. However, Sinopec Shanghai is 3.54 times more volatile than TELE2 B . It trades about 0.11 of its potential returns per unit of risk. TELE2 B is currently generating about -0.19 per unit of risk. If you would invest 14.00 in Sinopec Shanghai Petrochemical on October 11, 2024 and sell it today you would earn a total of 1.00 from holding Sinopec Shanghai Petrochemical or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Sinopec Shanghai Petrochemical vs. TELE2 B
Performance |
| Timeline |
| Sinopec Shanghai Pet |
| TELE2 -B- |
Sinopec Shanghai and TELE2 -B- Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinopec Shanghai and TELE2 -B-
The main advantage of trading using opposite Sinopec Shanghai and TELE2 -B- positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinopec Shanghai position performs unexpectedly, TELE2 -B- 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 TELE2 -B- will offset losses from the drop in TELE2 -B-'s long position.| Sinopec Shanghai vs. PLAYMATES TOYS | Sinopec Shanghai vs. Columbia Sportswear | Sinopec Shanghai vs. Ultra Clean Holdings | Sinopec Shanghai vs. Cars Inc |
| TELE2 -B- vs. Sunstone Hotel Investors | TELE2 -B- vs. Hollywood Bowl Group | TELE2 -B- vs. Xenia Hotels Resorts | TELE2 -B- vs. Pebblebrook Hotel Trust |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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