Correlation Between Shenzhen Shenbao and Xinjiang Baodi
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By analyzing existing cross correlation between Shenzhen Shenbao Industrial and Xinjiang Baodi Mining, you can compare the effects of market volatilities on Shenzhen Shenbao and Xinjiang Baodi 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 Xinjiang Baodi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Shenbao and Xinjiang Baodi.
Diversification Opportunities for Shenzhen Shenbao and Xinjiang Baodi
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenzhen and Xinjiang is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Shenbao Industrial and Xinjiang Baodi Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Baodi Mining 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 Xinjiang Baodi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Baodi Mining has no effect on the direction of Shenzhen Shenbao i.e., Shenzhen Shenbao and Xinjiang Baodi go up and down completely randomly.
Pair Corralation between Shenzhen Shenbao and Xinjiang Baodi
Assuming the 90 days trading horizon Shenzhen Shenbao Industrial is expected to generate 0.68 times more return on investment than Xinjiang Baodi. However, Shenzhen Shenbao Industrial is 1.47 times less risky than Xinjiang Baodi. It trades about 0.24 of its potential returns per unit of risk. Xinjiang Baodi Mining is currently generating about 0.14 per unit of risk. If you would invest 669.00 in Shenzhen Shenbao Industrial on September 4, 2024 and sell it today you would earn a total of 59.00 from holding Shenzhen Shenbao Industrial or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Shenbao Industrial vs. Xinjiang Baodi Mining
Performance |
| Timeline |
| Shenzhen Shenbao Ind |
| Xinjiang Baodi Mining |
Shenzhen Shenbao and Xinjiang Baodi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Shenbao and Xinjiang Baodi
The main advantage of trading using opposite Shenzhen Shenbao and Xinjiang Baodi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Shenbao position performs unexpectedly, Xinjiang Baodi 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 Xinjiang Baodi will offset losses from the drop in Xinjiang Baodi's long position.| Shenzhen Shenbao vs. Xinjiang Baodi Mining | Shenzhen Shenbao vs. Sinosteel Luonai Materials | Shenzhen Shenbao vs. Guangdong Silvere Sci | Shenzhen Shenbao vs. Fuda Alloy Materials |
| Xinjiang Baodi vs. Zijin Mining Group | Xinjiang Baodi vs. Wanhua Chemical Group | Xinjiang Baodi vs. Baoshan Iron Steel | Xinjiang Baodi vs. Shandong Gold Mining |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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