Correlation Between Penghua Shenzhen and Shanghai CEO
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By analyzing existing cross correlation between Penghua Shenzhen Energy and Shanghai CEO Environmental, you can compare the effects of market volatilities on Penghua Shenzhen and Shanghai CEO 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 Penghua Shenzhen with a short position of Shanghai CEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penghua Shenzhen and Shanghai CEO.
Diversification Opportunities for Penghua Shenzhen and Shanghai CEO
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Penghua and Shanghai is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Penghua Shenzhen Energy and Shanghai CEO Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai CEO Environ and Penghua Shenzhen 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 Penghua Shenzhen Energy are associated (or correlated) with Shanghai CEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai CEO Environ has no effect on the direction of Penghua Shenzhen i.e., Penghua Shenzhen and Shanghai CEO go up and down completely randomly.
Pair Corralation between Penghua Shenzhen and Shanghai CEO
Assuming the 90 days trading horizon Penghua Shenzhen Energy is expected to generate 0.23 times more return on investment than Shanghai CEO. However, Penghua Shenzhen Energy is 4.32 times less risky than Shanghai CEO. It trades about 0.34 of its potential returns per unit of risk. Shanghai CEO Environmental is currently generating about -0.18 per unit of risk. If you would invest 601.00 in Penghua Shenzhen Energy on September 24, 2024 and sell it today you would earn a total of 24.00 from holding Penghua Shenzhen Energy or generate 3.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
Penghua Shenzhen Energy vs. Shanghai CEO Environmental
Performance |
Timeline |
Penghua Shenzhen Energy |
Shanghai CEO Environ |
Penghua Shenzhen and Shanghai CEO Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Penghua Shenzhen and Shanghai CEO
The main advantage of trading using opposite Penghua Shenzhen and Shanghai CEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penghua Shenzhen position performs unexpectedly, Shanghai CEO 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 Shanghai CEO will offset losses from the drop in Shanghai CEO's long position.Penghua Shenzhen vs. Industrial and Commercial | Penghua Shenzhen vs. Kweichow Moutai Co | Penghua Shenzhen vs. Agricultural Bank of | Penghua Shenzhen vs. China Mobile Limited |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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