Correlation Between Shenzhen MTC and China Southern
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By analyzing existing cross correlation between Shenzhen MTC Co and China Southern SSE, you can compare the effects of market volatilities on Shenzhen MTC and China Southern 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 China Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen MTC and China Southern.
Diversification Opportunities for Shenzhen MTC and China Southern
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and China is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen MTC Co and China Southern SSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Southern SSE 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 China Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Southern SSE has no effect on the direction of Shenzhen MTC i.e., Shenzhen MTC and China Southern go up and down completely randomly.
Pair Corralation between Shenzhen MTC and China Southern
Assuming the 90 days trading horizon Shenzhen MTC Co is expected to under-perform the China Southern. In addition to that, Shenzhen MTC is 1.5 times more volatile than China Southern SSE. It trades about -0.07 of its total potential returns per unit of risk. China Southern SSE is currently generating about -0.03 per unit of volatility. If you would invest 208.00 in China Southern SSE on September 13, 2024 and sell it today you would lose (2.00) from holding China Southern SSE or give up 0.96% 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. China Southern SSE
Performance |
| Timeline |
| Shenzhen MTC |
| China Southern SSE |
Shenzhen MTC and China Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen MTC and China Southern
The main advantage of trading using opposite Shenzhen MTC and China Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen MTC position performs unexpectedly, China Southern 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 China Southern will offset losses from the drop in China Southern's long position.| Shenzhen MTC vs. Nuode Investment Co | Shenzhen MTC vs. Zhongrun Resources Investment | Shenzhen MTC vs. Zoje Resources Investment | Shenzhen MTC vs. XinJiang GuoTong Pipeline |
| China Southern vs. China Southern CSI | China Southern vs. China Universal CS | China Southern vs. China Southern CSI | China Southern vs. China Universal CSI |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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