Correlation Between Sinopec Shanghai and ASURE SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Sinopec Shanghai and ASURE SOFTWARE 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 ASURE SOFTWARE 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 ASURE SOFTWARE, you can compare the effects of market volatilities on Sinopec Shanghai and ASURE SOFTWARE 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 ASURE SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinopec Shanghai and ASURE SOFTWARE.
Diversification Opportunities for Sinopec Shanghai and ASURE SOFTWARE
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sinopec and ASURE is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sinopec Shanghai Petrochemical and ASURE SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASURE SOFTWARE 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 ASURE SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASURE SOFTWARE has no effect on the direction of Sinopec Shanghai i.e., Sinopec Shanghai and ASURE SOFTWARE go up and down completely randomly.
Pair Corralation between Sinopec Shanghai and ASURE SOFTWARE
Assuming the 90 days trading horizon Sinopec Shanghai Petrochemical is expected to generate 1.74 times more return on investment than ASURE SOFTWARE. However, Sinopec Shanghai is 1.74 times more volatile than ASURE SOFTWARE. It trades about 0.03 of its potential returns per unit of risk. ASURE SOFTWARE is currently generating about 0.01 per unit of risk. If you would invest 16.00 in Sinopec Shanghai Petrochemical on September 1, 2024 and sell it today you would lose (1.00) from holding Sinopec Shanghai Petrochemical or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinopec Shanghai Petrochemical vs. ASURE SOFTWARE
Performance |
| Timeline |
| Sinopec Shanghai Pet |
| ASURE SOFTWARE |
Sinopec Shanghai and ASURE SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinopec Shanghai and ASURE SOFTWARE
The main advantage of trading using opposite Sinopec Shanghai and ASURE SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinopec Shanghai position performs unexpectedly, ASURE SOFTWARE 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 ASURE SOFTWARE will offset losses from the drop in ASURE SOFTWARE's long position.| Sinopec Shanghai vs. Darden Restaurants | Sinopec Shanghai vs. SBI Insurance Group | Sinopec Shanghai vs. SWISS WATER DECAFFCOFFEE | Sinopec Shanghai vs. Lion One Metals |
| ASURE SOFTWARE vs. PennyMac Mortgage Investment | ASURE SOFTWARE vs. Autohome ADR | ASURE SOFTWARE vs. bet at home AG | ASURE SOFTWARE vs. NURAN WIRELESS INC |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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