Correlation Between APEX International and Shanghai Commercial
Can any of the company-specific risk be diversified away by investing in both APEX International and Shanghai Commercial 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 APEX International and Shanghai Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APEX International Financial and Shanghai Commercial Savings, you can compare the effects of market volatilities on APEX International and Shanghai Commercial 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 APEX International with a short position of Shanghai Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of APEX International and Shanghai Commercial.
Diversification Opportunities for APEX International and Shanghai Commercial
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between APEX and Shanghai is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding APEX International Financial and Shanghai Commercial Savings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Commercial and APEX International 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 APEX International Financial are associated (or correlated) with Shanghai Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Commercial has no effect on the direction of APEX International i.e., APEX International and Shanghai Commercial go up and down completely randomly.
Pair Corralation between APEX International and Shanghai Commercial
Assuming the 90 days trading horizon APEX International Financial is expected to under-perform the Shanghai Commercial. In addition to that, APEX International is 1.04 times more volatile than Shanghai Commercial Savings. It trades about -0.23 of its total potential returns per unit of risk. Shanghai Commercial Savings is currently generating about 0.24 per unit of volatility. If you would invest 3,720 in Shanghai Commercial Savings on September 25, 2024 and sell it today you would earn a total of 315.00 from holding Shanghai Commercial Savings or generate 8.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
APEX International Financial vs. Shanghai Commercial Savings
Performance |
Timeline |
APEX International |
Shanghai Commercial |
APEX International and Shanghai Commercial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with APEX International and Shanghai Commercial
The main advantage of trading using opposite APEX International and Shanghai Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APEX International position performs unexpectedly, Shanghai Commercial 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 Commercial will offset losses from the drop in Shanghai Commercial's long position.APEX International vs. Mitake Information | APEX International vs. Interactive Digital Technologies | APEX International vs. K Way Information | APEX International vs. Jentech Precision Industrial |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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