This module allows you to analyze existing cross correlation between CAC 40 and Shanghai. You can compare the effects of market volatilities on CAC 40 and Shanghai 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 CAC 40 with a short position of Shanghai. See also your portfolio center. Please also check ongoing floating volatility patterns of CAC 40 and Shanghai.
Assuming 30 trading days horizon, CAC 40 is expected to under-perform the Shanghai. But the index apears to be less risky and, when comparing its historical volatility, CAC 40 is 1.38 times less risky than Shanghai. The index trades about -0.11 of its potential returns per unit of risk. The Shanghai is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 251,190 in Shanghai on October 17, 2018 and sell it today you would earn a total of 16,721 from holding Shanghai or generate 6.66% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding CAC 40 and Shanghai in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Shanghai and CAC 40 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 CAC 40 are associated (or correlated) with Shanghai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai has no effect on the direction of CAC 40 i.e. CAC 40 and Shanghai go up and down completely randomly.
Build portfolios using Macroaxis predefined set of investing ideas. Many of Macroaxis investing ideas can easily outperform a given market. Ideas can also be optimized per your risk profile before portfolio origination is invoked.