Correlation Between Shanghai OPM and China Building
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By analyzing existing cross correlation between Shanghai OPM Biosciences and China Building Material, you can compare the effects of market volatilities on Shanghai OPM and China Building 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 OPM with a short position of China Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai OPM and China Building.
Diversification Opportunities for Shanghai OPM and China Building
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and China is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai OPM Biosciences and China Building Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Building Material and Shanghai OPM 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 OPM Biosciences are associated (or correlated) with China Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Building Material has no effect on the direction of Shanghai OPM i.e., Shanghai OPM and China Building go up and down completely randomly.
Pair Corralation between Shanghai OPM and China Building
Assuming the 90 days trading horizon Shanghai OPM Biosciences is expected to under-perform the China Building. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai OPM Biosciences is 1.69 times less risky than China Building. The stock trades about -0.59 of its potential returns per unit of risk. The China Building Material is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 773.00 in China Building Material on October 9, 2024 and sell it today you would lose (85.00) from holding China Building Material or give up 11.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Shanghai OPM Biosciences vs. China Building Material
Performance |
Timeline |
Shanghai OPM Biosciences |
China Building Material |
Shanghai OPM and China Building Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shanghai OPM and China Building
The main advantage of trading using opposite Shanghai OPM and China Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai OPM position performs unexpectedly, China Building 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 China Building will offset losses from the drop in China Building's long position.Shanghai OPM vs. Ming Yang Smart | Shanghai OPM vs. 159681 | Shanghai OPM vs. 159005 | Shanghai OPM vs. Loctek Ergonomic Technology |
China Building vs. Kuang Chi Technologies | China Building vs. Guangzhou KingTeller Technology | China Building vs. Sharetronic Data Technology | China Building vs. Shandong Longquan Pipeline |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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