Correlation Between Jizhong Energy and Shenzhen MYS
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By analyzing existing cross correlation between Jizhong Energy Resources and Shenzhen MYS Environmental, you can compare the effects of market volatilities on Jizhong Energy and Shenzhen MYS 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 Jizhong Energy with a short position of Shenzhen MYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jizhong Energy and Shenzhen MYS.
Diversification Opportunities for Jizhong Energy and Shenzhen MYS
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jizhong and Shenzhen is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Jizhong Energy Resources and Shenzhen MYS Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen MYS Environ and Jizhong Energy 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 Jizhong Energy Resources are associated (or correlated) with Shenzhen MYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen MYS Environ has no effect on the direction of Jizhong Energy i.e., Jizhong Energy and Shenzhen MYS go up and down completely randomly.
Pair Corralation between Jizhong Energy and Shenzhen MYS
Assuming the 90 days trading horizon Jizhong Energy is expected to generate 3.65 times less return on investment than Shenzhen MYS. But when comparing it to its historical volatility, Jizhong Energy Resources is 1.62 times less risky than Shenzhen MYS. It trades about 0.07 of its potential returns per unit of risk. Shenzhen MYS Environmental is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 192.00 in Shenzhen MYS Environmental on October 22, 2024 and sell it today you would earn a total of 146.00 from holding Shenzhen MYS Environmental or generate 76.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jizhong Energy Resources vs. Shenzhen MYS Environmental
Performance |
| Timeline |
| Jizhong Energy Resources |
| Shenzhen MYS Environ |
Jizhong Energy and Shenzhen MYS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jizhong Energy and Shenzhen MYS
The main advantage of trading using opposite Jizhong Energy and Shenzhen MYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jizhong Energy position performs unexpectedly, Shenzhen MYS 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 MYS will offset losses from the drop in Shenzhen MYS's long position.The idea behind Jizhong Energy Resources and Shenzhen MYS Environmental 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.
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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