This module allows you to analyze existing cross correlation between Shanghai and Hang Seng. You can compare the effects of market volatilities on Shanghai and Hang Seng 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 with a short position of Hang Seng. See also your portfolio center. Please also check ongoing floating volatility patterns of Shanghai and Hang Seng.
|Time Horizon||30 Days Login to change|
Assuming 30 trading days horizon, Shanghai is expected to under-perform the Hang Seng. But the index apears to be less risky and, when comparing its historical volatility, Shanghai is 1.5 times less risky than Hang Seng. The index trades about -0.61 of its potential returns per unit of risk. The Hang Seng is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 3,293,070 in Hang Seng on January 23, 2018 and sell it today you would lose (205,707) from holding Hang Seng or give up 6.25% of portfolio value over 30 days.