Correlation Between Shanghai CEO and China Northern

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Can any of the company-specific risk be diversified away by investing in both Shanghai CEO and China Northern 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 Shanghai CEO and China Northern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shanghai CEO Environmental and China Northern Rare, you can compare the effects of market volatilities on Shanghai CEO and China Northern 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 CEO with a short position of China Northern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai CEO and China Northern.

Diversification Opportunities for Shanghai CEO and China Northern

ShanghaiChinaDiversified AwayShanghaiChinaDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Shanghai and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai CEO Environmental and China Northern Rare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Northern Rare and Shanghai CEO 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 CEO Environmental are associated (or correlated) with China Northern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Northern Rare has no effect on the direction of Shanghai CEO i.e., Shanghai CEO and China Northern go up and down completely randomly.

Pair Corralation between Shanghai CEO and China Northern

If you would invest  737.00  in Shanghai CEO Environmental on September 16, 2024 and sell it today you would earn a total of  284.00  from holding Shanghai CEO Environmental or generate 38.53% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy1.69%
ValuesDaily Returns

Shanghai CEO Environmental  vs.  China Northern Rare

 Performance 
JavaScript chart by amCharts 3.21.15OctNov 0102030
JavaScript chart by amCharts 3.21.15688335 600111
       Timeline  
Shanghai CEO Environ 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Shanghai CEO Environmental are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shanghai CEO sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec7.588.599.51010.511
China Northern Rare 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days China Northern Rare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, China Northern is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Shanghai CEO and China Northern Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.24-6.92-4.6-2.280.03872.474.987.4910.0 0.010.020.030.04
JavaScript chart by amCharts 3.21.15688335 600111
       Returns  

Pair Trading with Shanghai CEO and China Northern

The main advantage of trading using opposite Shanghai CEO and China Northern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai CEO position performs unexpectedly, China Northern 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 China Northern will offset losses from the drop in China Northern's long position.
The idea behind Shanghai CEO Environmental and China Northern Rare 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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