Correlation Between Shenzhen Coship and Mengtian Home
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By analyzing existing cross correlation between Shenzhen Coship Electronics and Mengtian Home Group, you can compare the effects of market volatilities on Shenzhen Coship and Mengtian Home 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 Coship with a short position of Mengtian Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Coship and Mengtian Home.
Diversification Opportunities for Shenzhen Coship and Mengtian Home
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shenzhen and Mengtian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Coship Electronics and Mengtian Home Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mengtian Home Group and Shenzhen Coship 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 Coship Electronics are associated (or correlated) with Mengtian Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mengtian Home Group has no effect on the direction of Shenzhen Coship i.e., Shenzhen Coship and Mengtian Home go up and down completely randomly.
Pair Corralation between Shenzhen Coship and Mengtian Home
Assuming the 90 days trading horizon Shenzhen Coship Electronics is expected to under-perform the Mengtian Home. In addition to that, Shenzhen Coship is 1.38 times more volatile than Mengtian Home Group. It trades about -0.23 of its total potential returns per unit of risk. Mengtian Home Group is currently generating about 0.08 per unit of volatility. If you would invest 1,076 in Mengtian Home Group on November 7, 2024 and sell it today you would earn a total of 27.00 from holding Mengtian Home Group or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Coship Electronics vs. Mengtian Home Group
Performance |
| Timeline |
| Shenzhen Coship Elec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Mengtian Home Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Shenzhen Coship and Mengtian Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Coship and Mengtian Home
The main advantage of trading using opposite Shenzhen Coship and Mengtian Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Coship position performs unexpectedly, Mengtian Home 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 Mengtian Home will offset losses from the drop in Mengtian Home's long position.The idea behind Shenzhen Coship Electronics and Mengtian Home Group 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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