Correlation Between Shanghai Suochen and Shijiazhuang Tonhe
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By analyzing existing cross correlation between Shanghai Suochen Information and Shijiazhuang Tonhe Electronics, you can compare the effects of market volatilities on Shanghai Suochen and Shijiazhuang Tonhe 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 Suochen with a short position of Shijiazhuang Tonhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Suochen and Shijiazhuang Tonhe.
Diversification Opportunities for Shanghai Suochen and Shijiazhuang Tonhe
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Shijiazhuang is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Suochen Information and Shijiazhuang Tonhe Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shijiazhuang Tonhe and Shanghai Suochen 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 Suochen Information are associated (or correlated) with Shijiazhuang Tonhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shijiazhuang Tonhe has no effect on the direction of Shanghai Suochen i.e., Shanghai Suochen and Shijiazhuang Tonhe go up and down completely randomly.
Pair Corralation between Shanghai Suochen and Shijiazhuang Tonhe
Assuming the 90 days trading horizon Shanghai Suochen Information is expected to generate 1.42 times more return on investment than Shijiazhuang Tonhe. However, Shanghai Suochen is 1.42 times more volatile than Shijiazhuang Tonhe Electronics. It trades about 0.14 of its potential returns per unit of risk. Shijiazhuang Tonhe Electronics is currently generating about 0.12 per unit of risk. If you would invest 4,451 in Shanghai Suochen Information on September 24, 2024 and sell it today you would earn a total of 1,985 from holding Shanghai Suochen Information or generate 44.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.36% |
Values | Daily Returns |
Shanghai Suochen Information vs. Shijiazhuang Tonhe Electronics
Performance |
Timeline |
Shanghai Suochen Inf |
Shijiazhuang Tonhe |
Shanghai Suochen and Shijiazhuang Tonhe Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shanghai Suochen and Shijiazhuang Tonhe
The main advantage of trading using opposite Shanghai Suochen and Shijiazhuang Tonhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Suochen position performs unexpectedly, Shijiazhuang Tonhe 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 Shijiazhuang Tonhe will offset losses from the drop in Shijiazhuang Tonhe's long position.Shanghai Suochen vs. Industrial and Commercial | Shanghai Suochen vs. Agricultural Bank of | Shanghai Suochen vs. China Construction Bank | Shanghai Suochen vs. Bank of China |
Shijiazhuang Tonhe vs. PetroChina Co Ltd | Shijiazhuang Tonhe vs. China Mobile Limited | Shijiazhuang Tonhe vs. CNOOC Limited | Shijiazhuang Tonhe vs. Ping An Insurance |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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