Correlation Between Shenzhen Centralcon and Henan Shuanghui
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By analyzing existing cross correlation between Shenzhen Centralcon Investment and Henan Shuanghui Investment, you can compare the effects of market volatilities on Shenzhen Centralcon and Henan Shuanghui 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 Centralcon with a short position of Henan Shuanghui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Centralcon and Henan Shuanghui.
Diversification Opportunities for Shenzhen Centralcon and Henan Shuanghui
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shenzhen and Henan is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Centralcon Investment and Henan Shuanghui Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henan Shuanghui Inve and Shenzhen Centralcon 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 Centralcon Investment are associated (or correlated) with Henan Shuanghui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henan Shuanghui Inve has no effect on the direction of Shenzhen Centralcon i.e., Shenzhen Centralcon and Henan Shuanghui go up and down completely randomly.
Pair Corralation between Shenzhen Centralcon and Henan Shuanghui
Assuming the 90 days trading horizon Shenzhen Centralcon Investment is expected to generate 3.0 times more return on investment than Henan Shuanghui. However, Shenzhen Centralcon is 3.0 times more volatile than Henan Shuanghui Investment. It trades about 0.61 of its potential returns per unit of risk. Henan Shuanghui Investment is currently generating about 0.2 per unit of risk. If you would invest 494.00 in Shenzhen Centralcon Investment on December 1, 2024 and sell it today you would earn a total of 218.00 from holding Shenzhen Centralcon Investment or generate 44.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Centralcon Investment vs. Henan Shuanghui Investment
Performance |
| Timeline |
| Shenzhen Centralcon |
| Henan Shuanghui Inve |
Shenzhen Centralcon and Henan Shuanghui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Centralcon and Henan Shuanghui
The main advantage of trading using opposite Shenzhen Centralcon and Henan Shuanghui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Centralcon position performs unexpectedly, Henan Shuanghui 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 Henan Shuanghui will offset losses from the drop in Henan Shuanghui's long position.The idea behind Shenzhen Centralcon Investment and Henan Shuanghui Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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