Correlation Between Shenzhen Glory and Chenzhou Jingui
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By analyzing existing cross correlation between Shenzhen Glory Medical and Chenzhou Jingui Silver, you can compare the effects of market volatilities on Shenzhen Glory and Chenzhou Jingui 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 Chenzhou Jingui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Glory and Chenzhou Jingui.
Diversification Opportunities for Shenzhen Glory and Chenzhou Jingui
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Chenzhou is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Glory Medical and Chenzhou Jingui Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chenzhou Jingui Silver 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 Chenzhou Jingui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chenzhou Jingui Silver has no effect on the direction of Shenzhen Glory i.e., Shenzhen Glory and Chenzhou Jingui go up and down completely randomly.
Pair Corralation between Shenzhen Glory and Chenzhou Jingui
Assuming the 90 days trading horizon Shenzhen Glory Medical is expected to generate 1.26 times more return on investment than Chenzhou Jingui. However, Shenzhen Glory is 1.26 times more volatile than Chenzhou Jingui Silver. It trades about 0.19 of its potential returns per unit of risk. Chenzhou Jingui Silver is currently generating about 0.17 per unit of risk. If you would invest 294.00 in Shenzhen Glory Medical on November 8, 2024 and sell it today you would earn a total of 22.00 from holding Shenzhen Glory Medical or generate 7.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Glory Medical vs. Chenzhou Jingui Silver
Performance |
| Timeline |
| Shenzhen Glory Medical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Chenzhou Jingui Silver |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shenzhen Glory and Chenzhou Jingui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Glory and Chenzhou Jingui
The main advantage of trading using opposite Shenzhen Glory and Chenzhou Jingui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Glory position performs unexpectedly, Chenzhou Jingui 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 Chenzhou Jingui will offset losses from the drop in Chenzhou Jingui's long position.The idea behind Shenzhen Glory Medical and Chenzhou Jingui Silver pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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