Correlation Between 1847 Holdings and Shanghai Industrial

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Can any of the company-specific risk be diversified away by investing in both 1847 Holdings and Shanghai Industrial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining 1847 Holdings and Shanghai Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1847 Holdings LLC and Shanghai Industrial Holdings, you can compare the effects of market volatilities on 1847 Holdings and Shanghai Industrial 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 1847 Holdings with a short position of Shanghai Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1847 Holdings and Shanghai Industrial.

Diversification Opportunities for 1847 Holdings and Shanghai Industrial

0.62
  Correlation Coefficient

Poor diversification

The 3 months correlation between 1847 and Shanghai is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding 1847 Holdings LLC and Shanghai Industrial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Industrial and 1847 Holdings 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 1847 Holdings LLC are associated (or correlated) with Shanghai Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Industrial has no effect on the direction of 1847 Holdings i.e., 1847 Holdings and Shanghai Industrial go up and down completely randomly.

Pair Corralation between 1847 Holdings and Shanghai Industrial

If you would invest  115.00  in Shanghai Industrial Holdings on October 11, 2024 and sell it today you would earn a total of  0.00  from holding Shanghai Industrial Holdings or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy5.0%
ValuesDaily Returns

1847 Holdings LLC  vs.  Shanghai Industrial Holdings

 Performance 
       Timeline  
1847 Holdings LLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days 1847 Holdings LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.
Shanghai Industrial 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Shanghai Industrial Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Shanghai Industrial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

1847 Holdings and Shanghai Industrial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with 1847 Holdings and Shanghai Industrial

The main advantage of trading using opposite 1847 Holdings and Shanghai Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1847 Holdings position performs unexpectedly, Shanghai Industrial 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 Industrial will offset losses from the drop in Shanghai Industrial's long position.
The idea behind 1847 Holdings LLC and Shanghai Industrial Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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