Correlation Between Shenzhen SDG and Tsinghuatongfang
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By analyzing existing cross correlation between Shenzhen SDG Information and Tsinghuatongfang Co, you can compare the effects of market volatilities on Shenzhen SDG and Tsinghuatongfang 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 SDG with a short position of Tsinghuatongfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen SDG and Tsinghuatongfang.
Diversification Opportunities for Shenzhen SDG and Tsinghuatongfang
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shenzhen and Tsinghuatongfang is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen SDG Information and Tsinghuatongfang Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsinghuatongfang and Shenzhen SDG 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 SDG Information are associated (or correlated) with Tsinghuatongfang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsinghuatongfang has no effect on the direction of Shenzhen SDG i.e., Shenzhen SDG and Tsinghuatongfang go up and down completely randomly.
Pair Corralation between Shenzhen SDG and Tsinghuatongfang
Assuming the 90 days trading horizon Shenzhen SDG Information is expected to generate 1.21 times more return on investment than Tsinghuatongfang. However, Shenzhen SDG is 1.21 times more volatile than Tsinghuatongfang Co. It trades about 0.2 of its potential returns per unit of risk. Tsinghuatongfang Co is currently generating about 0.22 per unit of risk. If you would invest 522.00 in Shenzhen SDG Information on November 7, 2024 and sell it today you would earn a total of 40.00 from holding Shenzhen SDG Information or generate 7.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen SDG Information vs. Tsinghuatongfang Co
Performance |
| Timeline |
| Shenzhen SDG Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tsinghuatongfang |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shenzhen SDG and Tsinghuatongfang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen SDG and Tsinghuatongfang
The main advantage of trading using opposite Shenzhen SDG and Tsinghuatongfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen SDG position performs unexpectedly, Tsinghuatongfang 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 Tsinghuatongfang will offset losses from the drop in Tsinghuatongfang's long position.The idea behind Shenzhen SDG Information and Tsinghuatongfang Co 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.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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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