Correlation Between Shanghai Metersbonwe and Changchun Faway
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By analyzing existing cross correlation between Shanghai Metersbonwe FashionAccessories and Changchun Faway Automobile, you can compare the effects of market volatilities on Shanghai Metersbonwe and Changchun Faway 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 Metersbonwe with a short position of Changchun Faway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Metersbonwe and Changchun Faway.
Diversification Opportunities for Shanghai Metersbonwe and Changchun Faway
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Changchun is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Metersbonwe FashionAc and Changchun Faway Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun Faway Auto and Shanghai Metersbonwe 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 Metersbonwe FashionAccessories are associated (or correlated) with Changchun Faway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun Faway Auto has no effect on the direction of Shanghai Metersbonwe i.e., Shanghai Metersbonwe and Changchun Faway go up and down completely randomly.
Pair Corralation between Shanghai Metersbonwe and Changchun Faway
Assuming the 90 days trading horizon Shanghai Metersbonwe FashionAccessories is expected to generate 2.42 times more return on investment than Changchun Faway. However, Shanghai Metersbonwe is 2.42 times more volatile than Changchun Faway Automobile. It trades about 0.21 of its potential returns per unit of risk. Changchun Faway Automobile is currently generating about 0.13 per unit of risk. If you would invest 158.00 in Shanghai Metersbonwe FashionAccessories on September 20, 2024 and sell it today you would earn a total of 83.00 from holding Shanghai Metersbonwe FashionAccessories or generate 52.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Shanghai Metersbonwe FashionAc vs. Changchun Faway Automobile
Performance |
Timeline |
Shanghai Metersbonwe |
Changchun Faway Auto |
Shanghai Metersbonwe and Changchun Faway Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shanghai Metersbonwe and Changchun Faway
The main advantage of trading using opposite Shanghai Metersbonwe and Changchun Faway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Metersbonwe position performs unexpectedly, Changchun Faway 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 Changchun Faway will offset losses from the drop in Changchun Faway's long position.Shanghai Metersbonwe vs. Industrial and Commercial | Shanghai Metersbonwe vs. Agricultural Bank of | Shanghai Metersbonwe vs. China Construction Bank | Shanghai Metersbonwe vs. Bank of China |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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