Correlation Between Shenzhen Clou and Shanghai Rendu
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By analyzing existing cross correlation between Shenzhen Clou Electronics and Shanghai Rendu Biotechnology, you can compare the effects of market volatilities on Shenzhen Clou and Shanghai Rendu 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 Rendu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Clou and Shanghai Rendu.
Diversification Opportunities for Shenzhen Clou and Shanghai Rendu
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Shanghai is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Clou Electronics and Shanghai Rendu Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Rendu Biote 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 Rendu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Rendu Biote has no effect on the direction of Shenzhen Clou i.e., Shenzhen Clou and Shanghai Rendu go up and down completely randomly.
Pair Corralation between Shenzhen Clou and Shanghai Rendu
Assuming the 90 days trading horizon Shenzhen Clou Electronics is expected to generate 1.21 times more return on investment than Shanghai Rendu. However, Shenzhen Clou is 1.21 times more volatile than Shanghai Rendu Biotechnology. It trades about 0.16 of its potential returns per unit of risk. Shanghai Rendu Biotechnology is currently generating about -0.06 per unit of risk. If you would invest 446.00 in Shenzhen Clou Electronics on September 13, 2024 and sell it today you would earn a total of 53.00 from holding Shenzhen Clou Electronics or generate 11.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Clou Electronics vs. Shanghai Rendu Biotechnology
Performance |
| Timeline |
| Shenzhen Clou Electronics |
| Shanghai Rendu Biote |
Shenzhen Clou and Shanghai Rendu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Clou and Shanghai Rendu
The main advantage of trading using opposite Shenzhen Clou and Shanghai Rendu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Clou position performs unexpectedly, Shanghai Rendu 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 Rendu will offset losses from the drop in Shanghai Rendu's long position.| Shenzhen Clou vs. Industrial and Commercial | Shenzhen Clou vs. Agricultural Bank of | Shenzhen Clou vs. China Construction Bank | Shenzhen Clou vs. Bank of China |
| Shanghai Rendu vs. Industrial and Commercial | Shanghai Rendu vs. China Construction Bank | Shanghai Rendu vs. Bank of China | Shanghai Rendu vs. Agricultural Bank of |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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