Correlation Between Transportadora and Sinopec Shanghai
Can any of the company-specific risk be diversified away by investing in both Transportadora and Sinopec Shanghai 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 Transportadora and Sinopec Shanghai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transportadora de Gas and Sinopec Shanghai Petrochemical, you can compare the effects of market volatilities on Transportadora and Sinopec Shanghai 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 Transportadora with a short position of Sinopec Shanghai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and Sinopec Shanghai.
Diversification Opportunities for Transportadora and Sinopec Shanghai
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Transportadora and Sinopec is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas and Sinopec Shanghai Petrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopec Shanghai Pet and Transportadora 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 Transportadora de Gas are associated (or correlated) with Sinopec Shanghai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopec Shanghai Pet has no effect on the direction of Transportadora i.e., Transportadora and Sinopec Shanghai go up and down completely randomly.
Pair Corralation between Transportadora and Sinopec Shanghai
Assuming the 90 days trading horizon Transportadora de Gas is expected to generate 0.7 times more return on investment than Sinopec Shanghai. However, Transportadora de Gas is 1.44 times less risky than Sinopec Shanghai. It trades about 0.1 of its potential returns per unit of risk. Sinopec Shanghai Petrochemical is currently generating about 0.06 per unit of risk. If you would invest 1,670 in Transportadora de Gas on September 3, 2024 and sell it today you would earn a total of 1,190 from holding Transportadora de Gas or generate 71.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transportadora de Gas vs. Sinopec Shanghai Petrochemical
Performance |
| Timeline |
| Transportadora de Gas |
| Sinopec Shanghai Pet |
Transportadora and Sinopec Shanghai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and Sinopec Shanghai
The main advantage of trading using opposite Transportadora and Sinopec Shanghai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora position performs unexpectedly, Sinopec Shanghai 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 Sinopec Shanghai will offset losses from the drop in Sinopec Shanghai's long position.| Transportadora vs. COPLAND ROAD CAPITAL | Transportadora vs. H FARM SPA | Transportadora vs. BII Railway Transportation | Transportadora vs. Penta Ocean Construction Co |
| Sinopec Shanghai vs. Marathon Petroleum Corp | Sinopec Shanghai vs. Neste Oyj | Sinopec Shanghai vs. ENEOS Holdings | Sinopec Shanghai vs. PTT OILRETBUS FOR BA10 |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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