Correlation Between Shanghai Sanyou and Tieling Newcity

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

Diversification Opportunities for Shanghai Sanyou and Tieling Newcity

-0.39
  Correlation Coefficient

Very good diversification

The 3 months correlation between Shanghai and Tieling is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Sanyou Medical and Tieling Newcity Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tieling Newcity Inve and Shanghai Sanyou 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 Sanyou Medical are associated (or correlated) with Tieling Newcity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tieling Newcity Inve has no effect on the direction of Shanghai Sanyou i.e., Shanghai Sanyou and Tieling Newcity go up and down completely randomly.

Pair Corralation between Shanghai Sanyou and Tieling Newcity

Assuming the 90 days trading horizon Shanghai Sanyou Medical is expected to under-perform the Tieling Newcity. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Sanyou Medical is 1.05 times less risky than Tieling Newcity. The stock trades about -0.02 of its potential returns per unit of risk. The Tieling Newcity Investment is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  291.00  in Tieling Newcity Investment on August 16, 2025 and sell it today you would earn a total of  95.00  from holding Tieling Newcity Investment or generate 32.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.31%
ValuesDaily Returns

Shanghai Sanyou Medical  vs.  Tieling Newcity Investment

 Performance 
       Timeline  
Shanghai Sanyou Medical 

Risk-Adjusted Performance

Weakest

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

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Tieling Newcity Investment are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Tieling Newcity sustained solid returns over the last few months and may actually be approaching a breakup point.

Shanghai Sanyou and Tieling Newcity Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Shanghai Sanyou and Tieling Newcity

The main advantage of trading using opposite Shanghai Sanyou and Tieling Newcity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Sanyou position performs unexpectedly, Tieling Newcity 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 Tieling Newcity will offset losses from the drop in Tieling Newcity's long position.
The idea behind Shanghai Sanyou Medical and Tieling Newcity Investment 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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