Correlation Between Shenzhen SDG and Hangzhou Pinming
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By analyzing existing cross correlation between Shenzhen SDG Information and Hangzhou Pinming Software, you can compare the effects of market volatilities on Shenzhen SDG and Hangzhou Pinming 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 Hangzhou Pinming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen SDG and Hangzhou Pinming.
Diversification Opportunities for Shenzhen SDG and Hangzhou Pinming
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Hangzhou is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen SDG Information and Hangzhou Pinming Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Pinming Software 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 Hangzhou Pinming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Pinming Software has no effect on the direction of Shenzhen SDG i.e., Shenzhen SDG and Hangzhou Pinming go up and down completely randomly.
Pair Corralation between Shenzhen SDG and Hangzhou Pinming
Assuming the 90 days trading horizon Shenzhen SDG is expected to generate 2.01 times less return on investment than Hangzhou Pinming. In addition to that, Shenzhen SDG is 1.11 times more volatile than Hangzhou Pinming Software. It trades about 0.2 of its total potential returns per unit of risk. Hangzhou Pinming Software is currently generating about 0.45 per unit of volatility. If you would invest 2,202 in Hangzhou Pinming Software on November 7, 2024 and sell it today you would earn a total of 364.00 from holding Hangzhou Pinming Software or generate 16.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen SDG Information vs. Hangzhou Pinming Software
Performance |
| Timeline |
| Shenzhen SDG Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Hangzhou Pinming Software |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shenzhen SDG and Hangzhou Pinming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen SDG and Hangzhou Pinming
The main advantage of trading using opposite Shenzhen SDG and Hangzhou Pinming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen SDG position performs unexpectedly, Hangzhou Pinming 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 Hangzhou Pinming will offset losses from the drop in Hangzhou Pinming's long position.The idea behind Shenzhen SDG Information and Hangzhou Pinming Software 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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