Correlation Between Shenzhen MYS and Dongjiang Environmental
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By analyzing existing cross correlation between Shenzhen MYS Environmental and Dongjiang Environmental Co, you can compare the effects of market volatilities on Shenzhen MYS and Dongjiang Environmental 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 MYS with a short position of Dongjiang Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen MYS and Dongjiang Environmental.
Diversification Opportunities for Shenzhen MYS and Dongjiang Environmental
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Dongjiang is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen MYS Environmental and Dongjiang Environmental Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongjiang Environmental and Shenzhen MYS 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 MYS Environmental are associated (or correlated) with Dongjiang Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongjiang Environmental has no effect on the direction of Shenzhen MYS i.e., Shenzhen MYS and Dongjiang Environmental go up and down completely randomly.
Pair Corralation between Shenzhen MYS and Dongjiang Environmental
Assuming the 90 days trading horizon Shenzhen MYS Environmental is expected to generate 1.6 times more return on investment than Dongjiang Environmental. However, Shenzhen MYS is 1.6 times more volatile than Dongjiang Environmental Co. It trades about 0.32 of its potential returns per unit of risk. Dongjiang Environmental Co is currently generating about -0.19 per unit of risk. If you would invest 325.00 in Shenzhen MYS Environmental on August 28, 2024 and sell it today you would earn a total of 88.00 from holding Shenzhen MYS Environmental or generate 27.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen MYS Environmental vs. Dongjiang Environmental Co
Performance |
| Timeline |
| Shenzhen MYS Environ |
| Dongjiang Environmental |
Shenzhen MYS and Dongjiang Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen MYS and Dongjiang Environmental
The main advantage of trading using opposite Shenzhen MYS and Dongjiang Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen MYS position performs unexpectedly, Dongjiang Environmental 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 Dongjiang Environmental will offset losses from the drop in Dongjiang Environmental's long position.| Shenzhen MYS vs. Gansu Yasheng Industrial | Shenzhen MYS vs. Integrated Electronic Systems | Shenzhen MYS vs. Chengtun Mining Group | Shenzhen MYS vs. Zhejiang Yayi Metal |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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