Correlation Between Shenzhen Clou and Shanghai Action
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By analyzing existing cross correlation between Shenzhen Clou Electronics and Shanghai Action Education, you can compare the effects of market volatilities on Shenzhen Clou and Shanghai Action 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 Clou with a short position of Shanghai Action. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Clou and Shanghai Action.
Diversification Opportunities for Shenzhen Clou and Shanghai Action
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shenzhen and Shanghai is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Clou Electronics and Shanghai Action Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Action Education and Shenzhen Clou 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 Clou Electronics are associated (or correlated) with Shanghai Action. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Action Education has no effect on the direction of Shenzhen Clou i.e., Shenzhen Clou and Shanghai Action go up and down completely randomly.
Pair Corralation between Shenzhen Clou and Shanghai Action
Assuming the 90 days trading horizon Shenzhen Clou Electronics is expected to generate 1.01 times more return on investment than Shanghai Action. However, Shenzhen Clou is 1.01 times more volatile than Shanghai Action Education. It trades about 0.02 of its potential returns per unit of risk. Shanghai Action Education is currently generating about 0.01 per unit of risk. If you would invest 397.00 in Shenzhen Clou Electronics on November 8, 2024 and sell it today you would earn a total of 22.00 from holding Shenzhen Clou Electronics or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Clou Electronics vs. Shanghai Action Education
Performance |
| Timeline |
| Shenzhen Clou Electronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shanghai Action Education |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Shenzhen Clou and Shanghai Action Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Clou and Shanghai Action
The main advantage of trading using opposite Shenzhen Clou and Shanghai Action positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Clou position performs unexpectedly, Shanghai Action 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 Action will offset losses from the drop in Shanghai Action's long position.The idea behind Shenzhen Clou Electronics and Shanghai Action Education 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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