Correlation Between Shenzhen SDG and Xinya Electronic
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By analyzing existing cross correlation between Shenzhen SDG Information and Xinya Electronic Co, you can compare the effects of market volatilities on Shenzhen SDG and Xinya Electronic 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 Xinya Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen SDG and Xinya Electronic.
Diversification Opportunities for Shenzhen SDG and Xinya Electronic
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Xinya is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen SDG Information and Xinya Electronic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinya Electronic 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 Xinya Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinya Electronic has no effect on the direction of Shenzhen SDG i.e., Shenzhen SDG and Xinya Electronic go up and down completely randomly.
Pair Corralation between Shenzhen SDG and Xinya Electronic
Assuming the 90 days trading horizon Shenzhen SDG is expected to generate 8.27 times less return on investment than Xinya Electronic. But when comparing it to its historical volatility, Shenzhen SDG Information is 1.24 times less risky than Xinya Electronic. It trades about 0.05 of its potential returns per unit of risk. Xinya Electronic Co is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,324 in Xinya Electronic Co on September 27, 2024 and sell it today you would earn a total of 253.00 from holding Xinya Electronic Co or generate 19.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen SDG Information vs. Xinya Electronic Co
Performance |
| Timeline |
| Shenzhen SDG Information |
| Xinya Electronic |
Shenzhen SDG and Xinya Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen SDG and Xinya Electronic
The main advantage of trading using opposite Shenzhen SDG and Xinya Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen SDG position performs unexpectedly, Xinya Electronic 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 Xinya Electronic will offset losses from the drop in Xinya Electronic's long position.| Shenzhen SDG vs. Industrial and Commercial | Shenzhen SDG vs. Agricultural Bank of | Shenzhen SDG vs. China Construction Bank | Shenzhen SDG vs. Bank of China |
| Xinya Electronic vs. Shengtak New Material | Xinya Electronic vs. Ningxia Building Materials | Xinya Electronic vs. Jiugui Liquor Co | Xinya Electronic vs. Shenzhen SDG Information |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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