Correlation Between Shenzhen Agricultural and Hua Xia
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By analyzing existing cross correlation between Shenzhen Agricultural Products and Hua Xia Bank, you can compare the effects of market volatilities on Shenzhen Agricultural and Hua Xia 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 Agricultural with a short position of Hua Xia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Agricultural and Hua Xia.
Diversification Opportunities for Shenzhen Agricultural and Hua Xia
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Hua is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Agricultural Products and Hua Xia Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Xia Bank and Shenzhen Agricultural 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 Agricultural Products are associated (or correlated) with Hua Xia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Xia Bank has no effect on the direction of Shenzhen Agricultural i.e., Shenzhen Agricultural and Hua Xia go up and down completely randomly.
Pair Corralation between Shenzhen Agricultural and Hua Xia
Assuming the 90 days trading horizon Shenzhen Agricultural Products is expected to generate 1.2 times more return on investment than Hua Xia. However, Shenzhen Agricultural is 1.2 times more volatile than Hua Xia Bank. It trades about 0.33 of its potential returns per unit of risk. Hua Xia Bank is currently generating about 0.18 per unit of risk. If you would invest 656.00 in Shenzhen Agricultural Products on September 5, 2024 and sell it today you would earn a total of 112.00 from holding Shenzhen Agricultural Products or generate 17.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Agricultural Products vs. Hua Xia Bank
Performance |
| Timeline |
| Shenzhen Agricultural |
| Hua Xia Bank |
Shenzhen Agricultural and Hua Xia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Agricultural and Hua Xia
The main advantage of trading using opposite Shenzhen Agricultural and Hua Xia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Agricultural position performs unexpectedly, Hua Xia 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 Hua Xia will offset losses from the drop in Hua Xia's long position.| Shenzhen Agricultural vs. Hua Xia Bank | Shenzhen Agricultural vs. HeBei Jinniu Chemical | Shenzhen Agricultural vs. Ningbo Tech Bank Co | Shenzhen Agricultural vs. Liuzhou Chemical Industry |
| Hua Xia vs. Ningbo Fangzheng Automobile | Hua Xia vs. Sinocat Environmental Technology | Hua Xia vs. Jiangsu Xinri E Vehicle | Hua Xia vs. Sanbo Hospital Management |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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