Correlation Between Shenzhen Glory and China Longyuan
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By analyzing existing cross correlation between Shenzhen Glory Medical and China Longyuan Power, you can compare the effects of market volatilities on Shenzhen Glory and China Longyuan 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 Glory with a short position of China Longyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Glory and China Longyuan.
Diversification Opportunities for Shenzhen Glory and China Longyuan
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and China is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Glory Medical and China Longyuan Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Longyuan Power and Shenzhen Glory 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 Glory Medical are associated (or correlated) with China Longyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Longyuan Power has no effect on the direction of Shenzhen Glory i.e., Shenzhen Glory and China Longyuan go up and down completely randomly.
Pair Corralation between Shenzhen Glory and China Longyuan
Assuming the 90 days trading horizon Shenzhen Glory Medical is expected to under-perform the China Longyuan. In addition to that, Shenzhen Glory is 1.39 times more volatile than China Longyuan Power. It trades about -0.02 of its total potential returns per unit of risk. China Longyuan Power is currently generating about -0.02 per unit of volatility. If you would invest 1,870 in China Longyuan Power on November 1, 2024 and sell it today you would lose (370.00) from holding China Longyuan Power or give up 19.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Glory Medical vs. China Longyuan Power
Performance |
| Timeline |
| Shenzhen Glory Medical |
| China Longyuan Power |
Shenzhen Glory and China Longyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Glory and China Longyuan
The main advantage of trading using opposite Shenzhen Glory and China Longyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Glory position performs unexpectedly, China Longyuan 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 Longyuan will offset losses from the drop in China Longyuan's long position.| Shenzhen Glory vs. Aluminum Corp of | Shenzhen Glory vs. Beijing Kingsoft Office | Shenzhen Glory vs. Jiaozuo Wanfang Aluminum | Shenzhen Glory vs. AUPU Home Style |
| China Longyuan vs. Fujian Nanwang Environment | China Longyuan vs. De Rucci Healthy | China Longyuan vs. Yunnan Jianzhijia Health Chain | China Longyuan vs. Meinian Onehealth Healthcare |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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