Correlation Between Shenzhen Mindray and Zhongtong Guomai

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

By analyzing existing cross correlation between Shenzhen Mindray Bio Medical and Zhongtong Guomai Communication, you can compare the effects of market volatilities on Shenzhen Mindray and Zhongtong Guomai 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 Mindray with a short position of Zhongtong Guomai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Mindray and Zhongtong Guomai.

Diversification Opportunities for Shenzhen Mindray and Zhongtong Guomai

0.0

Correlation Coefficient

Shenzhen Mindray  Zhongtong Guomai

Pay attention - limited upside

The 3 months correlation between Shenzhen and Zhongtong is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Mindray Bio Medical and Zhongtong Guomai Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongtong Guomai Com and Shenzhen Mindray 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 Mindray Bio Medical are associated (or correlated) with Zhongtong Guomai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongtong Guomai Com has no effect on the direction of Shenzhen Mindray i.e., Shenzhen Mindray and Zhongtong Guomai go up and down completely randomly.

Pair Corralation between Shenzhen Mindray and Zhongtong Guomai

If you would invest  0.00  in Shenzhen Mindray Bio Medical on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Shenzhen Mindray Bio Medical or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.21%
Values	Daily Returns

Shenzhen Mindray Bio Medical  vs.  Zhongtong Guomai Communication

Shenzhen Mindray Bio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shenzhen Mindray Bio Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Shenzhen Mindray is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Zhongtong Guomai Com

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Zhongtong Guomai Communication are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zhongtong Guomai may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Shenzhen Mindray and Zhongtong Guomai

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

The idea behind Shenzhen Mindray Bio Medical and Zhongtong Guomai Communication 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..