Correlation Between Shenzhen Bingchuan and CSG Holding

Can any of the company-specific risk be diversified away by investing in both Shenzhen Bingchuan and CSG Holding 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 Bingchuan and CSG Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shenzhen Bingchuan Network and CSG Holding Co, you can compare the effects of market volatilities on Shenzhen Bingchuan and CSG Holding 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 Bingchuan with a short position of CSG Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Bingchuan and CSG Holding.

Diversification Opportunities for Shenzhen Bingchuan and CSG Holding

-0.38

Correlation Coefficient

Shenzhen Bingchuan  CSG Holding

Very good diversification

The 3 months correlation between Shenzhen and CSG is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Bingchuan Network and CSG Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSG Holding and Shenzhen Bingchuan 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 Bingchuan Network are associated (or correlated) with CSG Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSG Holding has no effect on the direction of Shenzhen Bingchuan i.e., Shenzhen Bingchuan and CSG Holding go up and down completely randomly.

Pair Corralation between Shenzhen Bingchuan and CSG Holding

Assuming the 90 days trading horizon Shenzhen Bingchuan Network is expected to generate 3.31 times more return on investment than CSG Holding. However, Shenzhen Bingchuan is 3.31 times more volatile than CSG Holding Co. It trades about 0.09 of its potential returns per unit of risk. CSG Holding Co is currently generating about 0.0 per unit of risk. If you would invest  1,408  in Shenzhen Bingchuan Network on September 27, 2024 and sell it today you would earn a total of  637.00  from holding Shenzhen Bingchuan Network or generate 45.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Shenzhen Bingchuan Network  vs.  CSG Holding Co

Shenzhen Bingchuan

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen Bingchuan Network are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenzhen Bingchuan sustained solid returns over the last few months and may actually be approaching a breakup point.

CSG Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSG Holding Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Shenzhen Bingchuan and CSG Holding

The main advantage of trading using opposite Shenzhen Bingchuan and CSG Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Bingchuan position performs unexpectedly, CSG Holding 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 CSG Holding will offset losses from the drop in CSG Holding's long position.

The idea behind Shenzhen Bingchuan Network and CSG Holding Co 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.