Correlation Between Shanghai Construction and SI-TECH Information
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By analyzing existing cross correlation between Shanghai Construction Group and SI TECH Information Technology, you can compare the effects of market volatilities on Shanghai Construction and SI-TECH Information 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 SI-TECH Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Construction and SI-TECH Information.
Diversification Opportunities for Shanghai Construction and SI-TECH Information
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shanghai and SI-TECH is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Construction Group and SI TECH Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SI TECH Information 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 SI-TECH Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SI TECH Information has no effect on the direction of Shanghai Construction i.e., Shanghai Construction and SI-TECH Information go up and down completely randomly.
Pair Corralation between Shanghai Construction and SI-TECH Information
Assuming the 90 days trading horizon Shanghai Construction Group is expected to under-perform the SI-TECH Information. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Construction Group is 3.23 times less risky than SI-TECH Information. The stock trades about -0.12 of its potential returns per unit of risk. The SI TECH Information Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,428 in SI TECH Information Technology on December 10, 2024 and sell it today you would earn a total of 17.00 from holding SI TECH Information Technology or generate 1.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Shanghai Construction Group vs. SI TECH Information Technology
Performance |
Timeline |
Shanghai Construction |
SI TECH Information |
Shanghai Construction and SI-TECH Information Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shanghai Construction and SI-TECH Information
The main advantage of trading using opposite Shanghai Construction and SI-TECH Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Construction position performs unexpectedly, SI-TECH Information 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 SI-TECH Information will offset losses from the drop in SI-TECH Information's long position.Shanghai Construction vs. Zhengzhou Coal Mining | Shanghai Construction vs. Guolin Environmental Tech | Shanghai Construction vs. Chengtun Mining Group | Shanghai Construction vs. Qingdao Hiron Commercial |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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