Correlation Between Shenzhen MYS and Jiangsu Zhongtian
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By analyzing existing cross correlation between Shenzhen MYS Environmental and Jiangsu Zhongtian Technology, you can compare the effects of market volatilities on Shenzhen MYS and Jiangsu Zhongtian 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 Jiangsu Zhongtian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen MYS and Jiangsu Zhongtian.
Diversification Opportunities for Shenzhen MYS and Jiangsu Zhongtian
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Jiangsu is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen MYS Environmental and Jiangsu Zhongtian Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Zhongtian 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 Jiangsu Zhongtian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Zhongtian has no effect on the direction of Shenzhen MYS i.e., Shenzhen MYS and Jiangsu Zhongtian go up and down completely randomly.
Pair Corralation between Shenzhen MYS and Jiangsu Zhongtian
Assuming the 90 days trading horizon Shenzhen MYS Environmental is expected to under-perform the Jiangsu Zhongtian. In addition to that, Shenzhen MYS is 2.26 times more volatile than Jiangsu Zhongtian Technology. It trades about -0.18 of its total potential returns per unit of risk. Jiangsu Zhongtian Technology is currently generating about -0.09 per unit of volatility. If you would invest 1,565 in Jiangsu Zhongtian Technology on September 25, 2024 and sell it today you would lose (54.00) from holding Jiangsu Zhongtian Technology or give up 3.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shenzhen MYS Environmental vs. Jiangsu Zhongtian Technology
Performance |
| Timeline |
| Shenzhen MYS Environ |
| Jiangsu Zhongtian |
Shenzhen MYS and Jiangsu Zhongtian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen MYS and Jiangsu Zhongtian
The main advantage of trading using opposite Shenzhen MYS and Jiangsu Zhongtian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen MYS position performs unexpectedly, Jiangsu Zhongtian 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 Jiangsu Zhongtian will offset losses from the drop in Jiangsu Zhongtian's long position.| Shenzhen MYS vs. Zijin Mining Group | Shenzhen MYS vs. Wanhua Chemical Group | Shenzhen MYS vs. Baoshan Iron Steel | Shenzhen MYS vs. Shandong Gold Mining |
| Jiangsu Zhongtian vs. Kweichow Moutai Co | Jiangsu Zhongtian vs. Contemporary Amperex Technology | Jiangsu Zhongtian vs. G bits Network Technology | Jiangsu Zhongtian vs. BYD Co Ltd |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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