Correlation Between Shenzhen MYS and Zhejiang Yongjin
Specify exactly 2 symbols:
By analyzing existing cross correlation between Shenzhen MYS Environmental and Zhejiang Yongjin Metal, you can compare the effects of market volatilities on Shenzhen MYS and Zhejiang Yongjin 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 Zhejiang Yongjin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen MYS and Zhejiang Yongjin.
Diversification Opportunities for Shenzhen MYS and Zhejiang Yongjin
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Zhejiang is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen MYS Environmental and Zhejiang Yongjin Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Yongjin Metal 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 Zhejiang Yongjin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Yongjin Metal has no effect on the direction of Shenzhen MYS i.e., Shenzhen MYS and Zhejiang Yongjin go up and down completely randomly.
Pair Corralation between Shenzhen MYS and Zhejiang Yongjin
Assuming the 90 days trading horizon Shenzhen MYS Environmental is expected to generate 2.34 times more return on investment than Zhejiang Yongjin. However, Shenzhen MYS is 2.34 times more volatile than Zhejiang Yongjin Metal. It trades about 0.24 of its potential returns per unit of risk. Zhejiang Yongjin Metal is currently generating about 0.01 per unit of risk. If you would invest 310.00 in Shenzhen MYS Environmental on August 31, 2024 and sell it today you would earn a total of 69.00 from holding Shenzhen MYS Environmental or generate 22.26% 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. Zhejiang Yongjin Metal
Performance |
| Timeline |
| Shenzhen MYS Environ |
| Zhejiang Yongjin Metal |
Shenzhen MYS and Zhejiang Yongjin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen MYS and Zhejiang Yongjin
The main advantage of trading using opposite Shenzhen MYS and Zhejiang Yongjin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen MYS position performs unexpectedly, Zhejiang Yongjin 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 Zhejiang Yongjin will offset losses from the drop in Zhejiang Yongjin's long position.The idea behind Shenzhen MYS Environmental and Zhejiang Yongjin Metal pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |