Correlation Between Shenzhen Noposion and Dazhong Transportation
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By analyzing existing cross correlation between Shenzhen Noposion Agrochemicals and Dazhong Transportation Group, you can compare the effects of market volatilities on Shenzhen Noposion and Dazhong Transportation 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 Noposion with a short position of Dazhong Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Noposion and Dazhong Transportation.
Diversification Opportunities for Shenzhen Noposion and Dazhong Transportation
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Dazhong is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Noposion Agrochemical and Dazhong Transportation Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dazhong Transportation and Shenzhen Noposion 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 Noposion Agrochemicals are associated (or correlated) with Dazhong Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dazhong Transportation has no effect on the direction of Shenzhen Noposion i.e., Shenzhen Noposion and Dazhong Transportation go up and down completely randomly.
Pair Corralation between Shenzhen Noposion and Dazhong Transportation
Assuming the 90 days trading horizon Shenzhen Noposion is expected to generate 2.94 times less return on investment than Dazhong Transportation. But when comparing it to its historical volatility, Shenzhen Noposion Agrochemicals is 1.16 times less risky than Dazhong Transportation. It trades about 0.02 of its potential returns per unit of risk. Dazhong Transportation Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Dazhong Transportation Group on August 25, 2024 and sell it today you would earn a total of 7.00 from holding Dazhong Transportation Group or generate 36.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Noposion Agrochemical vs. Dazhong Transportation Group
Performance |
| Timeline |
| Shenzhen Noposion |
| Dazhong Transportation |
Shenzhen Noposion and Dazhong Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Noposion and Dazhong Transportation
The main advantage of trading using opposite Shenzhen Noposion and Dazhong Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Noposion position performs unexpectedly, Dazhong Transportation 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 Dazhong Transportation will offset losses from the drop in Dazhong Transportation's long position.| Shenzhen Noposion vs. Zijin Mining Group | Shenzhen Noposion vs. Wanhua Chemical Group | Shenzhen Noposion vs. Baoshan Iron Steel | Shenzhen Noposion vs. Shandong Gold Mining |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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