Correlation Between New Hope and Shenzhen SDG
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By analyzing existing cross correlation between New Hope Dairy and Shenzhen SDG Service, you can compare the effects of market volatilities on New Hope and Shenzhen SDG 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 New Hope with a short position of Shenzhen SDG. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Hope and Shenzhen SDG.
Diversification Opportunities for New Hope and Shenzhen SDG
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between New and Shenzhen is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding New Hope Dairy and Shenzhen SDG Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen SDG Service and New Hope 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 New Hope Dairy are associated (or correlated) with Shenzhen SDG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen SDG Service has no effect on the direction of New Hope i.e., New Hope and Shenzhen SDG go up and down completely randomly.
Pair Corralation between New Hope and Shenzhen SDG
Assuming the 90 days trading horizon New Hope Dairy is expected to generate 1.28 times more return on investment than Shenzhen SDG. However, New Hope is 1.28 times more volatile than Shenzhen SDG Service. It trades about 0.19 of its potential returns per unit of risk. Shenzhen SDG Service is currently generating about -0.11 per unit of risk. If you would invest 1,240 in New Hope Dairy on September 25, 2024 and sell it today you would earn a total of 181.00 from holding New Hope Dairy or generate 14.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
New Hope Dairy vs. Shenzhen SDG Service
Performance |
Timeline |
New Hope Dairy |
Shenzhen SDG Service |
New Hope and Shenzhen SDG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with New Hope and Shenzhen SDG
The main advantage of trading using opposite New Hope and Shenzhen SDG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Hope position performs unexpectedly, Shenzhen SDG 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 Shenzhen SDG will offset losses from the drop in Shenzhen SDG's long position.New Hope vs. Jiujiang Shanshui Technology | New Hope vs. Niutech Environment Technology | New Hope vs. Kuang Chi Technologies | New Hope vs. Fujian Newland Computer |
Shenzhen SDG vs. PetroChina Co Ltd | Shenzhen SDG vs. China Mobile Limited | Shenzhen SDG vs. CNOOC Limited | Shenzhen SDG 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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