Correlation Between Shenzhen Shenbao and Beijing Lanxum
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By analyzing existing cross correlation between Shenzhen Shenbao Industrial and Beijing Lanxum Tech, you can compare the effects of market volatilities on Shenzhen Shenbao and Beijing Lanxum 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 Shenbao with a short position of Beijing Lanxum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Shenbao and Beijing Lanxum.
Diversification Opportunities for Shenzhen Shenbao and Beijing Lanxum
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Beijing is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Shenbao Industrial and Beijing Lanxum Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Lanxum Tech and Shenzhen Shenbao 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 Shenbao Industrial are associated (or correlated) with Beijing Lanxum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Lanxum Tech has no effect on the direction of Shenzhen Shenbao i.e., Shenzhen Shenbao and Beijing Lanxum go up and down completely randomly.
Pair Corralation between Shenzhen Shenbao and Beijing Lanxum
Assuming the 90 days trading horizon Shenzhen Shenbao is expected to generate 7.7 times less return on investment than Beijing Lanxum. But when comparing it to its historical volatility, Shenzhen Shenbao Industrial is 3.33 times less risky than Beijing Lanxum. It trades about 0.08 of its potential returns per unit of risk. Beijing Lanxum Tech is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 296.00 in Beijing Lanxum Tech on September 3, 2024 and sell it today you would earn a total of 725.00 from holding Beijing Lanxum Tech or generate 244.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.17% |
| Values | Daily Returns |
Shenzhen Shenbao Industrial vs. Beijing Lanxum Tech
Performance |
| Timeline |
| Shenzhen Shenbao Ind |
| Beijing Lanxum Tech |
Shenzhen Shenbao and Beijing Lanxum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Shenbao and Beijing Lanxum
The main advantage of trading using opposite Shenzhen Shenbao and Beijing Lanxum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Shenbao position performs unexpectedly, Beijing Lanxum 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 Beijing Lanxum will offset losses from the drop in Beijing Lanxum's long position.| Shenzhen Shenbao vs. Eastern Communications Co | Shenzhen Shenbao vs. Zhejiang Kingland Pipeline | Shenzhen Shenbao vs. Gome Telecom Equipment | Shenzhen Shenbao vs. China Satellite Communications |
| Beijing Lanxum vs. Fujian Rongji Software | Beijing Lanxum vs. Tongyu Communication | Beijing Lanxum vs. Western Superconducting Tech | Beijing Lanxum vs. Guangzhou Haige Communications |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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