Correlation Between China International and Shenzhen SDG
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By analyzing existing cross correlation between China International Capital and Shenzhen SDG Service, you can compare the effects of market volatilities on China International 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 China International with a short position of Shenzhen SDG. Check out your portfolio center. Please also check ongoing floating volatility patterns of China International and Shenzhen SDG.
Diversification Opportunities for China International and Shenzhen SDG
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Shenzhen is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding China International Capital 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 China International 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 China International Capital 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 China International i.e., China International and Shenzhen SDG go up and down completely randomly.
Pair Corralation between China International and Shenzhen SDG
Assuming the 90 days trading horizon China International Capital is expected to under-perform the Shenzhen SDG. But the stock apears to be less risky and, when comparing its historical volatility, China International Capital is 2.08 times less risky than Shenzhen SDG. The stock trades about -0.01 of its potential returns per unit of risk. The Shenzhen SDG Service is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,683 in Shenzhen SDG Service on October 13, 2024 and sell it today you would earn a total of 1,715 from holding Shenzhen SDG Service or generate 63.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
China International Capital vs. Shenzhen SDG Service
Performance |
Timeline |
China International |
Shenzhen SDG Service |
China International and Shenzhen SDG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China International and Shenzhen SDG
The main advantage of trading using opposite China International and Shenzhen SDG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China International 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.China International vs. Kidswant Children Products | China International vs. DO Home Collection | China International vs. Aba Chemicals Corp | China International vs. Oppein Home Group |
Shenzhen SDG vs. Fujian Wanchen Biotechnology | Shenzhen SDG vs. Bloomage Biotechnology Corp | Shenzhen SDG vs. Eyebright Medical Technology | Shenzhen SDG vs. Kontour Medical Technology |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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