Correlation Between Inner Mongolia and Shanghai Rongtai
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By analyzing existing cross correlation between Inner Mongolia Yuan and Shanghai Rongtai Health, you can compare the effects of market volatilities on Inner Mongolia and Shanghai Rongtai 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 Inner Mongolia with a short position of Shanghai Rongtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inner Mongolia and Shanghai Rongtai.
Diversification Opportunities for Inner Mongolia and Shanghai Rongtai
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Inner and Shanghai is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Inner Mongolia Yuan and Shanghai Rongtai Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Rongtai Health and Inner Mongolia 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 Inner Mongolia Yuan are associated (or correlated) with Shanghai Rongtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Rongtai Health has no effect on the direction of Inner Mongolia i.e., Inner Mongolia and Shanghai Rongtai go up and down completely randomly.
Pair Corralation between Inner Mongolia and Shanghai Rongtai
Assuming the 90 days trading horizon Inner Mongolia is expected to generate 1.68 times less return on investment than Shanghai Rongtai. In addition to that, Inner Mongolia is 1.12 times more volatile than Shanghai Rongtai Health. It trades about 0.1 of its total potential returns per unit of risk. Shanghai Rongtai Health is currently generating about 0.18 per unit of volatility. If you would invest 1,170 in Shanghai Rongtai Health on September 11, 2024 and sell it today you would earn a total of 338.00 from holding Shanghai Rongtai Health or generate 28.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Inner Mongolia Yuan vs. Shanghai Rongtai Health
Performance |
Timeline |
Inner Mongolia Yuan |
Shanghai Rongtai Health |
Inner Mongolia and Shanghai Rongtai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Inner Mongolia and Shanghai Rongtai
The main advantage of trading using opposite Inner Mongolia and Shanghai Rongtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inner Mongolia position performs unexpectedly, Shanghai Rongtai 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 Rongtai will offset losses from the drop in Shanghai Rongtai's long position.Inner Mongolia vs. TianJin 712 Communication | Inner Mongolia vs. Zhongtong Guomai Communication | Inner Mongolia vs. Tongyu Communication | Inner Mongolia vs. Zhejiang Daily Media |
Shanghai Rongtai vs. Lutian Machinery Co | Shanghai Rongtai vs. China Longyuan Power | Shanghai Rongtai vs. PetroChina Co Ltd | Shanghai Rongtai vs. Bank of China |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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