Correlation Between Shenzhen MYS and Shijiazhuang Tonhe
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By analyzing existing cross correlation between Shenzhen MYS Environmental and Shijiazhuang Tonhe Electronics, you can compare the effects of market volatilities on Shenzhen MYS and Shijiazhuang Tonhe 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 MYS with a short position of Shijiazhuang Tonhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen MYS and Shijiazhuang Tonhe.
Diversification Opportunities for Shenzhen MYS and Shijiazhuang Tonhe
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Shijiazhuang is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen MYS Environmental and Shijiazhuang Tonhe Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shijiazhuang Tonhe and Shenzhen MYS 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 MYS Environmental are associated (or correlated) with Shijiazhuang Tonhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shijiazhuang Tonhe has no effect on the direction of Shenzhen MYS i.e., Shenzhen MYS and Shijiazhuang Tonhe go up and down completely randomly.
Pair Corralation between Shenzhen MYS and Shijiazhuang Tonhe
Assuming the 90 days trading horizon Shenzhen MYS Environmental is expected to under-perform the Shijiazhuang Tonhe. In addition to that, Shenzhen MYS is 1.51 times more volatile than Shijiazhuang Tonhe Electronics. It trades about -0.11 of its total potential returns per unit of risk. Shijiazhuang Tonhe Electronics is currently generating about 0.18 per unit of volatility. If you would invest 1,676 in Shijiazhuang Tonhe Electronics on September 24, 2024 and sell it today you would earn a total of 138.00 from holding Shijiazhuang Tonhe Electronics or generate 8.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Shenzhen MYS Environmental vs. Shijiazhuang Tonhe Electronics
Performance |
Timeline |
Shenzhen MYS Environ |
Shijiazhuang Tonhe |
Shenzhen MYS and Shijiazhuang Tonhe Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shenzhen MYS and Shijiazhuang Tonhe
The main advantage of trading using opposite Shenzhen MYS and Shijiazhuang Tonhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen MYS position performs unexpectedly, Shijiazhuang Tonhe 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 Shijiazhuang Tonhe will offset losses from the drop in Shijiazhuang Tonhe's long position.Shenzhen MYS vs. Zijin Mining Group | Shenzhen MYS vs. Wanhua Chemical Group | Shenzhen MYS vs. Baoshan Iron Steel | Shenzhen MYS vs. Shandong Gold Mining |
Shijiazhuang Tonhe vs. PetroChina Co Ltd | Shijiazhuang Tonhe vs. China Mobile Limited | Shijiazhuang Tonhe vs. CNOOC Limited | Shijiazhuang Tonhe vs. Ping An Insurance |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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