Correlation Between Shanghai Zhangjiang and Anhui Jiuhuashan

Can any of the company-specific risk be diversified away by investing in both Shanghai Zhangjiang and Anhui Jiuhuashan 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 Zhangjiang and Anhui Jiuhuashan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shanghai Zhangjiang Hi Tech and Anhui Jiuhuashan Tourism, you can compare the effects of market volatilities on Shanghai Zhangjiang and Anhui Jiuhuashan 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 Zhangjiang with a short position of Anhui Jiuhuashan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Zhangjiang and Anhui Jiuhuashan.

Diversification Opportunities for Shanghai Zhangjiang and Anhui Jiuhuashan

0.03

Correlation Coefficient

Shanghai Zhangjiang  Anhui Jiuhuashan

Significant diversification

The 3 months correlation between Shanghai and Anhui is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Zhangjiang Hi Tech and Anhui Jiuhuashan Tourism in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Jiuhuashan Tourism and Shanghai Zhangjiang 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 Zhangjiang Hi Tech are associated (or correlated) with Anhui Jiuhuashan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Jiuhuashan Tourism has no effect on the direction of Shanghai Zhangjiang i.e., Shanghai Zhangjiang and Anhui Jiuhuashan go up and down completely randomly.

Pair Corralation between Shanghai Zhangjiang and Anhui Jiuhuashan

Assuming the 90 days trading horizon Shanghai Zhangjiang Hi Tech is expected to generate 1.11 times more return on investment than Anhui Jiuhuashan. However, Shanghai Zhangjiang is 1.11 times more volatile than Anhui Jiuhuashan Tourism. It trades about 0.08 of its potential returns per unit of risk. Anhui Jiuhuashan Tourism is currently generating about -0.12 per unit of risk. If you would invest  2,608  in Shanghai Zhangjiang Hi Tech on April 25, 2025 and sell it today you would earn a total of  167.00  from holding Shanghai Zhangjiang Hi Tech or generate 6.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Shanghai Zhangjiang Hi Tech  vs.  Anhui Jiuhuashan Tourism

Shanghai Zhangjiang

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Shanghai Zhangjiang Hi Tech are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shanghai Zhangjiang may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Anhui Jiuhuashan Tourism

Risk-Adjusted Performance

Very Weak

Over the last 90 days Anhui Jiuhuashan Tourism has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Shanghai Zhangjiang and Anhui Jiuhuashan

The main advantage of trading using opposite Shanghai Zhangjiang and Anhui Jiuhuashan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Zhangjiang position performs unexpectedly, Anhui Jiuhuashan 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 Anhui Jiuhuashan will offset losses from the drop in Anhui Jiuhuashan's long position.

The idea behind Shanghai Zhangjiang Hi Tech and Anhui Jiuhuashan Tourism 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.