Correlation Between Shenzhen MYS and Shanghai Rongtai
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By analyzing existing cross correlation between Shenzhen MYS Environmental and Shanghai Rongtai Health, you can compare the effects of market volatilities on Shenzhen MYS and Shanghai Rongtai 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 Shanghai Rongtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen MYS and Shanghai Rongtai.
Diversification Opportunities for Shenzhen MYS and Shanghai Rongtai
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Shanghai is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen MYS Environmental and Shanghai Rongtai Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Rongtai Health 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 Shanghai Rongtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Rongtai Health has no effect on the direction of Shenzhen MYS i.e., Shenzhen MYS and Shanghai Rongtai go up and down completely randomly.
Pair Corralation between Shenzhen MYS and Shanghai Rongtai
Assuming the 90 days trading horizon Shenzhen MYS Environmental is expected to generate 2.32 times more return on investment than Shanghai Rongtai. However, Shenzhen MYS is 2.32 times more volatile than Shanghai Rongtai Health. It trades about 0.22 of its potential returns per unit of risk. Shanghai Rongtai Health is currently generating about 0.11 per unit of risk. If you would invest 312.00 in Shenzhen MYS Environmental on August 30, 2024 and sell it today you would earn a total of 63.00 from holding Shenzhen MYS Environmental or generate 20.19% 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. Shanghai Rongtai Health
Performance |
| Timeline |
| Shenzhen MYS Environ |
| Shanghai Rongtai Health |
Shenzhen MYS and Shanghai Rongtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen MYS and Shanghai Rongtai
The main advantage of trading using opposite Shenzhen MYS and Shanghai Rongtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen MYS position performs unexpectedly, Shanghai Rongtai 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 Rongtai will offset losses from the drop in Shanghai Rongtai's long position.| Shenzhen MYS vs. Shandong Gold Mining | Shenzhen MYS vs. Rongsheng Petrochemical Co | Shenzhen MYS vs. Inner Mongolia BaoTou | Shenzhen MYS vs. Jiangxi Ganfeng Lithium |
| Shanghai Rongtai vs. Jiangxi Hengda Hi Tech | Shanghai Rongtai vs. Soyea Technology Co | Shanghai Rongtai vs. Yindu Kitchen Equipment | Shanghai Rongtai vs. Milkyway Chemical Supply |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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