Correlation Between Guangdong Shenglu and Shenzhen Mindray
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Shenzhen Mindray Bio Medical, you can compare the effects of market volatilities on Guangdong Shenglu and Shenzhen Mindray 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 Guangdong Shenglu with a short position of Shenzhen Mindray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Shenzhen Mindray.
Diversification Opportunities for Guangdong Shenglu and Shenzhen Mindray
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Shenzhen is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic and Shenzhen Mindray Bio Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Mindray Bio and Guangdong Shenglu 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 Guangdong Shenglu Telecommunication are associated (or correlated) with Shenzhen Mindray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Mindray Bio has no effect on the direction of Guangdong Shenglu i.e., Guangdong Shenglu and Shenzhen Mindray go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Shenzhen Mindray
Assuming the 90 days trading horizon Guangdong Shenglu Telecommunication is expected to generate 1.1 times more return on investment than Shenzhen Mindray. However, Guangdong Shenglu is 1.1 times more volatile than Shenzhen Mindray Bio Medical. It trades about 0.05 of its potential returns per unit of risk. Shenzhen Mindray Bio Medical is currently generating about -0.02 per unit of risk. If you would invest 611.00 in Guangdong Shenglu Telecommunication on August 25, 2024 and sell it today you would earn a total of 91.00 from holding Guangdong Shenglu Telecommunication or generate 14.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Shenzhen Mindray Bio Medical
Performance |
| Timeline |
| Guangdong Shenglu |
| Shenzhen Mindray Bio |
Guangdong Shenglu and Shenzhen Mindray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Shenglu and Shenzhen Mindray
The main advantage of trading using opposite Guangdong Shenglu and Shenzhen Mindray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu position performs unexpectedly, Shenzhen Mindray 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 Shenzhen Mindray will offset losses from the drop in Shenzhen Mindray's long position.| Guangdong Shenglu vs. Shenzhen MYS Environmental | Guangdong Shenglu vs. AVIC Fund Management | Guangdong Shenglu vs. Shenzhen Bingchuan Network | Guangdong Shenglu vs. Penghua Shenzhen Energy |
| Shenzhen Mindray vs. Luolai Home Textile | Shenzhen Mindray vs. Ziel Home Furnishing | Shenzhen Mindray vs. Songz Automobile Air | Shenzhen Mindray vs. Guangdong Shenglu Telecommunication |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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