Correlation Between Shenzhen Coship and Thinkingdom Media

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

Diversification Opportunities for Shenzhen Coship and Thinkingdom Media

0.8
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Shenzhen and Thinkingdom is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Coship Electronics and Thinkingdom Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thinkingdom Media and Shenzhen Coship 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 Shenzhen Coship Electronics are associated (or correlated) with Thinkingdom Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thinkingdom Media has no effect on the direction of Shenzhen Coship i.e., Shenzhen Coship and Thinkingdom Media go up and down completely randomly.

Pair Corralation between Shenzhen Coship and Thinkingdom Media

Assuming the 90 days trading horizon Shenzhen Coship Electronics is expected to generate 1.13 times more return on investment than Thinkingdom Media. However, Shenzhen Coship is 1.13 times more volatile than Thinkingdom Media Group. It trades about 0.31 of its potential returns per unit of risk. Thinkingdom Media Group is currently generating about 0.14 per unit of risk. If you would invest  375.00  in Shenzhen Coship Electronics on October 7, 2024 and sell it today you would earn a total of  246.00  from holding Shenzhen Coship Electronics or generate 65.6% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Shenzhen Coship Electronics  vs.  Thinkingdom Media Group

 Performance 
       Timeline  
Shenzhen Coship Elec 

Risk-Adjusted Performance

35 of 100

 
Weak
 
Strong
Very Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen Coship Electronics are ranked lower than 35 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenzhen Coship sustained solid returns over the last few months and may actually be approaching a breakup point.
Thinkingdom Media 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Thinkingdom Media Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Thinkingdom Media may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Shenzhen Coship and Thinkingdom Media Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Shenzhen Coship and Thinkingdom Media

The main advantage of trading using opposite Shenzhen Coship and Thinkingdom Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Coship position performs unexpectedly, Thinkingdom Media 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 Thinkingdom Media will offset losses from the drop in Thinkingdom Media's long position.
The idea behind Shenzhen Coship Electronics and Thinkingdom Media Group 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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