Correlation Between Shenzhen MTC and Aba Chemicals
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By analyzing existing cross correlation between Shenzhen MTC Co and Aba Chemicals Corp, you can compare the effects of market volatilities on Shenzhen MTC and Aba Chemicals 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 Aba Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen MTC and Aba Chemicals.
Diversification Opportunities for Shenzhen MTC and Aba Chemicals
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Aba is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen MTC Co and Aba Chemicals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aba Chemicals Corp 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 Aba Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aba Chemicals Corp has no effect on the direction of Shenzhen MTC i.e., Shenzhen MTC and Aba Chemicals go up and down completely randomly.
Pair Corralation between Shenzhen MTC and Aba Chemicals
Assuming the 90 days trading horizon Shenzhen MTC Co is expected to generate 0.62 times more return on investment than Aba Chemicals. However, Shenzhen MTC Co is 1.62 times less risky than Aba Chemicals. It trades about -0.07 of its potential returns per unit of risk. Aba Chemicals Corp is currently generating about -0.11 per unit of risk. If you would invest 532.00 in Shenzhen MTC Co on September 1, 2024 and sell it today you would lose (20.00) from holding Shenzhen MTC Co or give up 3.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen MTC Co vs. Aba Chemicals Corp
Performance |
| Timeline |
| Shenzhen MTC |
| Aba Chemicals Corp |
Shenzhen MTC and Aba Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen MTC and Aba Chemicals
The main advantage of trading using opposite Shenzhen MTC and Aba Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen MTC position performs unexpectedly, Aba Chemicals 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 Aba Chemicals will offset losses from the drop in Aba Chemicals' 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 |
| Aba Chemicals vs. Zijin Mining Group | Aba Chemicals vs. Wanhua Chemical Group | Aba Chemicals vs. Baoshan Iron Steel | Aba Chemicals vs. Shandong Gold Mining |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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