Correlation Between Tongling Nonferrous and Shenzhen Glory
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By analyzing existing cross correlation between Tongling Nonferrous Metals and Shenzhen Glory Medical, you can compare the effects of market volatilities on Tongling Nonferrous and Shenzhen Glory 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 Tongling Nonferrous with a short position of Shenzhen Glory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongling Nonferrous and Shenzhen Glory.
Diversification Opportunities for Tongling Nonferrous and Shenzhen Glory
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tongling and Shenzhen is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Tongling Nonferrous Metals and Shenzhen Glory Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Glory Medical and Tongling Nonferrous 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 Tongling Nonferrous Metals are associated (or correlated) with Shenzhen Glory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Glory Medical has no effect on the direction of Tongling Nonferrous i.e., Tongling Nonferrous and Shenzhen Glory go up and down completely randomly.
Pair Corralation between Tongling Nonferrous and Shenzhen Glory
Assuming the 90 days trading horizon Tongling Nonferrous is expected to generate 1.79 times less return on investment than Shenzhen Glory. But when comparing it to its historical volatility, Tongling Nonferrous Metals is 1.43 times less risky than Shenzhen Glory. It trades about 0.07 of its potential returns per unit of risk. Shenzhen Glory Medical is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 246.00 in Shenzhen Glory Medical on October 18, 2024 and sell it today you would earn a total of 48.00 from holding Shenzhen Glory Medical or generate 19.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tongling Nonferrous Metals vs. Shenzhen Glory Medical
Performance |
| Timeline |
| Tongling Nonferrous |
| Shenzhen Glory Medical |
Tongling Nonferrous and Shenzhen Glory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongling Nonferrous and Shenzhen Glory
The main advantage of trading using opposite Tongling Nonferrous and Shenzhen Glory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongling Nonferrous position performs unexpectedly, Shenzhen Glory 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 Shenzhen Glory will offset losses from the drop in Shenzhen Glory's long position.| Tongling Nonferrous vs. China Aluminum International | Tongling Nonferrous vs. Peoples Insurance of | Tongling Nonferrous vs. Guangdong Jingyi Metal | Tongling Nonferrous vs. Chongqing Shunbo Aluminum |
| Shenzhen Glory vs. Guangdong Jingyi Metal | Shenzhen Glory vs. Suzhou Industrial Park | Shenzhen Glory vs. Anhui Transport Consulting | Shenzhen Glory vs. Tongling Nonferrous Metals |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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