Correlation Between Dazhong Transportation and Shanghai CEO
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By analyzing existing cross correlation between Dazhong Transportation Group and Shanghai CEO Environmental, you can compare the effects of market volatilities on Dazhong Transportation and Shanghai CEO 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 Dazhong Transportation with a short position of Shanghai CEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dazhong Transportation and Shanghai CEO.
Diversification Opportunities for Dazhong Transportation and Shanghai CEO
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dazhong and Shanghai is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Dazhong Transportation Group and Shanghai CEO Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai CEO Environ and Dazhong Transportation 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 Dazhong Transportation Group are associated (or correlated) with Shanghai CEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai CEO Environ has no effect on the direction of Dazhong Transportation i.e., Dazhong Transportation and Shanghai CEO go up and down completely randomly.
Pair Corralation between Dazhong Transportation and Shanghai CEO
Assuming the 90 days trading horizon Dazhong Transportation Group is expected to generate 0.91 times more return on investment than Shanghai CEO. However, Dazhong Transportation Group is 1.1 times less risky than Shanghai CEO. It trades about -0.35 of its potential returns per unit of risk. Shanghai CEO Environmental is currently generating about -0.43 per unit of risk. If you would invest 26.00 in Dazhong Transportation Group on October 7, 2024 and sell it today you would lose (4.00) from holding Dazhong Transportation Group or give up 15.38% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Dazhong Transportation Group vs. Shanghai CEO Environmental
Performance |
Timeline |
Dazhong Transportation |
Shanghai CEO Environ |
Dazhong Transportation and Shanghai CEO Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dazhong Transportation and Shanghai CEO
The main advantage of trading using opposite Dazhong Transportation and Shanghai CEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dazhong Transportation position performs unexpectedly, Shanghai CEO 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 Shanghai CEO will offset losses from the drop in Shanghai CEO's long position.Dazhong Transportation vs. BeiGene | Dazhong Transportation vs. G bits Network Technology | Dazhong Transportation vs. China Mobile Limited | Dazhong Transportation vs. Gansu Jiu Steel |
Shanghai CEO vs. BeiGene | Shanghai CEO vs. G bits Network Technology | Shanghai CEO vs. China Mobile Limited | Shanghai CEO vs. Gansu Jiu Steel |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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