Correlation Between Shenzhen Glory and China Merchants
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By analyzing existing cross correlation between Shenzhen Glory Medical and China Merchants Shekou, you can compare the effects of market volatilities on Shenzhen Glory and China Merchants 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 Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Glory and China Merchants.
Diversification Opportunities for Shenzhen Glory and China Merchants
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenzhen and China is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Glory Medical and China Merchants Shekou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Merchants Shekou 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 Merchants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Merchants Shekou has no effect on the direction of Shenzhen Glory i.e., Shenzhen Glory and China Merchants go up and down completely randomly.
Pair Corralation between Shenzhen Glory and China Merchants
Assuming the 90 days trading horizon Shenzhen Glory Medical is expected to generate 0.83 times more return on investment than China Merchants. However, Shenzhen Glory Medical is 1.2 times less risky than China Merchants. It trades about 0.18 of its potential returns per unit of risk. China Merchants Shekou is currently generating about 0.04 per unit of risk. If you would invest 311.00 in Shenzhen Glory Medical on September 2, 2024 and sell it today you would earn a total of 27.00 from holding Shenzhen Glory Medical or generate 8.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Glory Medical vs. China Merchants Shekou
Performance |
| Timeline |
| Shenzhen Glory Medical |
| China Merchants Shekou |
Shenzhen Glory and China Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Glory and China Merchants
The main advantage of trading using opposite Shenzhen Glory and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Glory position performs unexpectedly, China Merchants 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 Merchants will offset losses from the drop in China Merchants' long position.| Shenzhen Glory vs. Industrial and Commercial | Shenzhen Glory vs. Agricultural Bank of | Shenzhen Glory vs. China Construction Bank | Shenzhen Glory vs. Bank of China |
| China Merchants vs. ChengDu Hi Tech Development | China Merchants vs. FSPG Hi Tech Co | China Merchants vs. Sunwave Communications Co | China Merchants vs. Zhejiang JIULI Hi tech |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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