Correlation Between Shanghai Construction and Hunan Mendale
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By analyzing existing cross correlation between Shanghai Construction Group and Hunan Mendale Hometextile, you can compare the effects of market volatilities on Shanghai Construction and Hunan Mendale 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 Construction with a short position of Hunan Mendale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Construction and Hunan Mendale.
Diversification Opportunities for Shanghai Construction and Hunan Mendale
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Hunan is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Construction Group and Hunan Mendale Hometextile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Mendale Hometextile and Shanghai Construction 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 Construction Group are associated (or correlated) with Hunan Mendale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Mendale Hometextile has no effect on the direction of Shanghai Construction i.e., Shanghai Construction and Hunan Mendale go up and down completely randomly.
Pair Corralation between Shanghai Construction and Hunan Mendale
Assuming the 90 days trading horizon Shanghai Construction is expected to generate 1.93 times less return on investment than Hunan Mendale. But when comparing it to its historical volatility, Shanghai Construction Group is 1.39 times less risky than Hunan Mendale. It trades about 0.09 of its potential returns per unit of risk. Hunan Mendale Hometextile is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 186.00 in Hunan Mendale Hometextile on October 4, 2024 and sell it today you would earn a total of 108.00 from holding Hunan Mendale Hometextile or generate 58.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Shanghai Construction Group vs. Hunan Mendale Hometextile
Performance |
Timeline |
Shanghai Construction |
Hunan Mendale Hometextile |
Shanghai Construction and Hunan Mendale Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shanghai Construction and Hunan Mendale
The main advantage of trading using opposite Shanghai Construction and Hunan Mendale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Construction position performs unexpectedly, Hunan Mendale 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 Hunan Mendale will offset losses from the drop in Hunan Mendale's long position.Shanghai Construction vs. Ming Yang Smart | Shanghai Construction vs. 159005 | Shanghai Construction vs. Loctek Ergonomic Technology | Shanghai Construction vs. Yes Optoelectronics Co |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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