Correlation Between China Securities and Shenzhen SDG
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By analyzing existing cross correlation between China Securities 800 and Shenzhen SDG Information, you can compare the effects of market volatilities on China Securities and Shenzhen SDG 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 China Securities with a short position of Shenzhen SDG. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Shenzhen SDG.
Diversification Opportunities for China Securities and Shenzhen SDG
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Shenzhen is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Shenzhen SDG Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen SDG Information and China Securities 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 China Securities 800 are associated (or correlated) with Shenzhen SDG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen SDG Information has no effect on the direction of China Securities i.e., China Securities and Shenzhen SDG go up and down completely randomly.
Pair Corralation between China Securities and Shenzhen SDG
Assuming the 90 days trading horizon China Securities is expected to generate 2.63 times less return on investment than Shenzhen SDG. But when comparing it to its historical volatility, China Securities 800 is 1.54 times less risky than Shenzhen SDG. It trades about 0.05 of its potential returns per unit of risk. Shenzhen SDG Information is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 446.00 in Shenzhen SDG Information on August 29, 2024 and sell it today you would earn a total of 118.00 from holding Shenzhen SDG Information or generate 26.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. Shenzhen SDG Information
Performance |
| Timeline |
China Securities and Shenzhen SDG Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Shenzhen SDG Information
Pair trading matchups for Shenzhen SDG
Pair Trading with China Securities and Shenzhen SDG
The main advantage of trading using opposite China Securities and Shenzhen SDG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Shenzhen SDG 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 SDG will offset losses from the drop in Shenzhen SDG's long position.| China Securities vs. Tibet Huayu Mining | China Securities vs. Keeson Technology Corp | China Securities vs. OBiO Technology Corp | China Securities vs. ROPEOK Technology Group |
| Shenzhen SDG vs. China State Construction | Shenzhen SDG vs. Huafa Industrial Co | Shenzhen SDG vs. China International Capital | Shenzhen SDG vs. Kweichow Moutai Co |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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