Correlation Between Shanghai Shuixing and Orient Sec
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By analyzing existing cross correlation between Shanghai Shuixing Home and Orient Sec Co, you can compare the effects of market volatilities on Shanghai Shuixing and Orient Sec 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 Shuixing with a short position of Orient Sec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Shuixing and Orient Sec.
Diversification Opportunities for Shanghai Shuixing and Orient Sec
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Orient is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Shuixing Home and Orient Sec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Sec and Shanghai Shuixing 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 Shuixing Home are associated (or correlated) with Orient Sec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Sec has no effect on the direction of Shanghai Shuixing i.e., Shanghai Shuixing and Orient Sec go up and down completely randomly.
Pair Corralation between Shanghai Shuixing and Orient Sec
Assuming the 90 days trading horizon Shanghai Shuixing Home is expected to generate 1.13 times more return on investment than Orient Sec. However, Shanghai Shuixing is 1.13 times more volatile than Orient Sec Co. It trades about 0.17 of its potential returns per unit of risk. Orient Sec Co is currently generating about 0.1 per unit of risk. If you would invest 1,188 in Shanghai Shuixing Home on September 24, 2024 and sell it today you would earn a total of 462.00 from holding Shanghai Shuixing Home or generate 38.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Shanghai Shuixing Home vs. Orient Sec Co
Performance |
Timeline |
Shanghai Shuixing Home |
Orient Sec |
Shanghai Shuixing and Orient Sec Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shanghai Shuixing and Orient Sec
The main advantage of trading using opposite Shanghai Shuixing and Orient Sec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Shuixing position performs unexpectedly, Orient Sec 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 Orient Sec will offset losses from the drop in Orient Sec's long position.Shanghai Shuixing vs. Cambricon Technologies Corp | Shanghai Shuixing vs. Loongson Technology Corp | Shanghai Shuixing vs. Shenzhen Fortune Trend | Shanghai Shuixing vs. Chongqing Road Bridge |
Orient Sec vs. Kweichow Moutai Co | Orient Sec vs. Contemporary Amperex Technology | Orient Sec vs. G bits Network Technology | Orient Sec vs. BYD Co Ltd |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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