Correlation Between Shanghai Sanyou and Shenzhen Glory
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By analyzing existing cross correlation between Shanghai Sanyou Medical and Shenzhen Glory Medical, you can compare the effects of market volatilities on Shanghai Sanyou and Shenzhen Glory 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 Shanghai Sanyou with a short position of Shenzhen Glory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Sanyou and Shenzhen Glory.
Diversification Opportunities for Shanghai Sanyou and Shenzhen Glory
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Shenzhen is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Sanyou Medical and Shenzhen Glory Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Glory Medical and Shanghai Sanyou 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 Shanghai Sanyou Medical are associated (or correlated) with Shenzhen Glory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Glory Medical has no effect on the direction of Shanghai Sanyou i.e., Shanghai Sanyou and Shenzhen Glory go up and down completely randomly.
Pair Corralation between Shanghai Sanyou and Shenzhen Glory
Assuming the 90 days trading horizon Shanghai Sanyou Medical is expected to generate 1.09 times more return on investment than Shenzhen Glory. However, Shanghai Sanyou is 1.09 times more volatile than Shenzhen Glory Medical. It trades about -0.17 of its potential returns per unit of risk. Shenzhen Glory Medical is currently generating about -0.39 per unit of risk. If you would invest 2,200 in Shanghai Sanyou Medical on October 7, 2024 and sell it today you would lose (269.00) from holding Shanghai Sanyou Medical or give up 12.23% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Shanghai Sanyou Medical vs. Shenzhen Glory Medical
Performance |
Timeline |
Shanghai Sanyou Medical |
Shenzhen Glory Medical |
Shanghai Sanyou and Shenzhen Glory Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shanghai Sanyou and Shenzhen Glory
The main advantage of trading using opposite Shanghai Sanyou and Shenzhen Glory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Sanyou position performs unexpectedly, Shenzhen Glory 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 Glory will offset losses from the drop in Shenzhen Glory's long position.Shanghai Sanyou vs. Nanjing Putian Telecommunications | Shanghai Sanyou vs. Tianjin Realty Development | Shanghai Sanyou vs. Zhongtong Guomai Communication | Shanghai Sanyou vs. Gansu Jiu Steel |
Shenzhen Glory vs. BeiGene | Shenzhen Glory vs. G bits Network Technology | Shenzhen Glory vs. China Mobile Limited | Shenzhen Glory vs. Gansu Jiu Steel |
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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