Correlation Between Shanghai Action and Shenwu Energy
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By analyzing existing cross correlation between Shanghai Action Education and Shenwu Energy Saving, you can compare the effects of market volatilities on Shanghai Action and Shenwu Energy 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 Action with a short position of Shenwu Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Action and Shenwu Energy.
Diversification Opportunities for Shanghai Action and Shenwu Energy
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shanghai and Shenwu is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Action Education and Shenwu Energy Saving in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenwu Energy Saving and Shanghai Action 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 Action Education are associated (or correlated) with Shenwu Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenwu Energy Saving has no effect on the direction of Shanghai Action i.e., Shanghai Action and Shenwu Energy go up and down completely randomly.
Pair Corralation between Shanghai Action and Shenwu Energy
Assuming the 90 days trading horizon Shanghai Action is expected to generate 2.56 times less return on investment than Shenwu Energy. But when comparing it to its historical volatility, Shanghai Action Education is 1.18 times less risky than Shenwu Energy. It trades about 0.11 of its potential returns per unit of risk. Shenwu Energy Saving is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 259.00 in Shenwu Energy Saving on September 12, 2024 and sell it today you would earn a total of 168.00 from holding Shenwu Energy Saving or generate 64.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Shanghai Action Education vs. Shenwu Energy Saving
Performance |
Timeline |
Shanghai Action Education |
Shenwu Energy Saving |
Shanghai Action and Shenwu Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shanghai Action and Shenwu Energy
The main advantage of trading using opposite Shanghai Action and Shenwu Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Action position performs unexpectedly, Shenwu Energy 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 Shenwu Energy will offset losses from the drop in Shenwu Energy's long position.Shanghai Action vs. Lutian Machinery Co | Shanghai Action vs. PetroChina Co Ltd | Shanghai Action vs. Bank of China | Shanghai Action vs. Gansu Jiu Steel |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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