Correlation Between Dezhan HealthCare and Shanghai Broadband
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By analyzing existing cross correlation between Dezhan HealthCare Co and Shanghai Broadband Technology, you can compare the effects of market volatilities on Dezhan HealthCare and Shanghai Broadband 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 Dezhan HealthCare with a short position of Shanghai Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dezhan HealthCare and Shanghai Broadband.
Diversification Opportunities for Dezhan HealthCare and Shanghai Broadband
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dezhan and Shanghai is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Dezhan HealthCare Co and Shanghai Broadband Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Broadband and Dezhan HealthCare 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 Dezhan HealthCare Co are associated (or correlated) with Shanghai Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Broadband has no effect on the direction of Dezhan HealthCare i.e., Dezhan HealthCare and Shanghai Broadband go up and down completely randomly.
Pair Corralation between Dezhan HealthCare and Shanghai Broadband
Assuming the 90 days trading horizon Dezhan HealthCare Co is expected to under-perform the Shanghai Broadband. But the stock apears to be less risky and, when comparing its historical volatility, Dezhan HealthCare Co is 1.33 times less risky than Shanghai Broadband. The stock trades about -0.05 of its potential returns per unit of risk. The Shanghai Broadband Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 302.00 in Shanghai Broadband Technology on November 7, 2024 and sell it today you would earn a total of 4.00 from holding Shanghai Broadband Technology or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dezhan HealthCare Co vs. Shanghai Broadband Technology
Performance |
| Timeline |
| Dezhan HealthCare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shanghai Broadband |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Dezhan HealthCare and Shanghai Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dezhan HealthCare and Shanghai Broadband
The main advantage of trading using opposite Dezhan HealthCare and Shanghai Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dezhan HealthCare position performs unexpectedly, Shanghai Broadband 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 Shanghai Broadband will offset losses from the drop in Shanghai Broadband's long position.The idea behind Dezhan HealthCare Co and Shanghai Broadband Technology 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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