Correlation Between Shenzhen SDG and Shaanxi Meineng
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By analyzing existing cross correlation between Shenzhen SDG Service and Shaanxi Meineng Clean, you can compare the effects of market volatilities on Shenzhen SDG and Shaanxi Meineng 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 SDG with a short position of Shaanxi Meineng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen SDG and Shaanxi Meineng.
Diversification Opportunities for Shenzhen SDG and Shaanxi Meineng
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shenzhen and Shaanxi is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen SDG Service and Shaanxi Meineng Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Meineng Clean and Shenzhen SDG 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 SDG Service are associated (or correlated) with Shaanxi Meineng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Meineng Clean has no effect on the direction of Shenzhen SDG i.e., Shenzhen SDG and Shaanxi Meineng go up and down completely randomly.
Pair Corralation between Shenzhen SDG and Shaanxi Meineng
Assuming the 90 days trading horizon Shenzhen SDG Service is expected to under-perform the Shaanxi Meineng. In addition to that, Shenzhen SDG is 1.24 times more volatile than Shaanxi Meineng Clean. It trades about -0.53 of its total potential returns per unit of risk. Shaanxi Meineng Clean is currently generating about -0.25 per unit of volatility. If you would invest 1,359 in Shaanxi Meineng Clean on October 6, 2024 and sell it today you would lose (152.00) from holding Shaanxi Meineng Clean or give up 11.18% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Shenzhen SDG Service vs. Shaanxi Meineng Clean
Performance |
Timeline |
Shenzhen SDG Service |
Shaanxi Meineng Clean |
Shenzhen SDG and Shaanxi Meineng Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shenzhen SDG and Shaanxi Meineng
The main advantage of trading using opposite Shenzhen SDG and Shaanxi Meineng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen SDG position performs unexpectedly, Shaanxi Meineng 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 Shaanxi Meineng will offset losses from the drop in Shaanxi Meineng's long position.Shenzhen SDG vs. Dongnan Electronics Co | Shenzhen SDG vs. Guangxi Wuzhou Communications | Shenzhen SDG vs. TongFu Microelectronics Co | Shenzhen SDG vs. Jiangyin Jianghua Microelectronics |
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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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