Correlation Between Shanghai Construction and SI TECH
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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 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Construction and SI TECH.
Diversification Opportunities for Shanghai Construction and SI TECH
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and 300608 is 0.74. 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. 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 go up and down completely randomly.
Pair Corralation between Shanghai Construction and SI TECH
Assuming the 90 days trading horizon Shanghai Construction is expected to generate 6.3 times less return on investment than SI TECH. But when comparing it to its historical volatility, Shanghai Construction Group is 2.69 times less risky than SI TECH. It trades about 0.02 of its potential returns per unit of risk. SI TECH Information Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 815.00 in SI TECH Information Technology on September 20, 2024 and sell it today you would earn a total of 448.00 from holding SI TECH Information Technology or generate 54.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
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 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shanghai Construction and SI TECH
The main advantage of trading using opposite Shanghai Construction and SI TECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Construction position performs unexpectedly, SI TECH 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 will offset losses from the drop in SI TECH's long position.Shanghai Construction vs. Ming Yang Smart | Shanghai Construction vs. 159681 | Shanghai Construction vs. 159005 | Shanghai Construction vs. Loctek Ergonomic Technology |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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