Correlation Between Sharetronic Data and Shenzhen Centralcon

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

By analyzing existing cross correlation between Sharetronic Data Technology and Shenzhen Centralcon Investment, you can compare the effects of market volatilities on Sharetronic Data and Shenzhen Centralcon 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 Sharetronic Data with a short position of Shenzhen Centralcon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sharetronic Data and Shenzhen Centralcon.

Diversification Opportunities for Sharetronic Data and Shenzhen Centralcon

0.48

Correlation Coefficient

Sharetronic Data  Shenzhen Centralcon

Very weak diversification

The 3 months correlation between Sharetronic and Shenzhen is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sharetronic Data Technology and Shenzhen Centralcon Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Centralcon and Sharetronic Data 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 Sharetronic Data Technology are associated (or correlated) with Shenzhen Centralcon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Centralcon has no effect on the direction of Sharetronic Data i.e., Sharetronic Data and Shenzhen Centralcon go up and down completely randomly.

Pair Corralation between Sharetronic Data and Shenzhen Centralcon

Assuming the 90 days trading horizon Sharetronic Data is expected to generate 1.81 times less return on investment than Shenzhen Centralcon. In addition to that, Sharetronic Data is 1.34 times more volatile than Shenzhen Centralcon Investment. It trades about 0.07 of its total potential returns per unit of risk. Shenzhen Centralcon Investment is currently generating about 0.16 per unit of volatility. If you would invest  470.00  in Shenzhen Centralcon Investment on December 27, 2024 and sell it today you would earn a total of  170.00  from holding Shenzhen Centralcon Investment or generate 36.17% return on investment over 90 days.

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

Sharetronic Data Technology  vs.  Shenzhen Centralcon Investment

Sharetronic Data Tec

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sharetronic Data Technology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sharetronic Data sustained solid returns over the last few months and may actually be approaching a breakup point.

Shenzhen Centralcon

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen Centralcon Investment are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenzhen Centralcon sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sharetronic Data and Shenzhen Centralcon

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

The idea behind Sharetronic Data Technology and Shenzhen Centralcon Investment 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..