Correlation Between Shenzhen MTC and Shaanxi Energy
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By analyzing existing cross correlation between Shenzhen MTC Co and Shaanxi Energy Investment, you can compare the effects of market volatilities on Shenzhen MTC and Shaanxi Energy 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 MTC with a short position of Shaanxi Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen MTC and Shaanxi Energy.
Diversification Opportunities for Shenzhen MTC and Shaanxi Energy
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Shaanxi is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen MTC Co and Shaanxi Energy Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Energy Investment and Shenzhen MTC 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 MTC Co are associated (or correlated) with Shaanxi Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Energy Investment has no effect on the direction of Shenzhen MTC i.e., Shenzhen MTC and Shaanxi Energy go up and down completely randomly.
Pair Corralation between Shenzhen MTC and Shaanxi Energy
Assuming the 90 days trading horizon Shenzhen MTC is expected to generate 3.37 times less return on investment than Shaanxi Energy. In addition to that, Shenzhen MTC is 1.29 times more volatile than Shaanxi Energy Investment. It trades about 0.01 of its total potential returns per unit of risk. Shaanxi Energy Investment is currently generating about 0.04 per unit of volatility. If you would invest 826.00 in Shaanxi Energy Investment on September 1, 2024 and sell it today you would earn a total of 134.00 from holding Shaanxi Energy Investment or generate 16.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen MTC Co vs. Shaanxi Energy Investment
Performance |
| Timeline |
| Shenzhen MTC |
| Shaanxi Energy Investment |
Shenzhen MTC and Shaanxi Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen MTC and Shaanxi Energy
The main advantage of trading using opposite Shenzhen MTC and Shaanxi Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen MTC position performs unexpectedly, Shaanxi Energy 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 Shaanxi Energy will offset losses from the drop in Shaanxi Energy's long position.| Shenzhen MTC vs. Jinling Hotel Corp | Shenzhen MTC vs. Nuode Investment Co | Shenzhen MTC vs. Cultural Investment Holdings | Shenzhen MTC vs. Chahua Modern Housewares |
| Shaanxi Energy vs. Zhejiang Kingland Pipeline | Shaanxi Energy vs. Zhejiang Dahua Technology | Shaanxi Energy vs. Changchun Faway Automobile | Shaanxi Energy vs. Shanghai Lingyun Industries |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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