Correlation Between Shenzhen Glory and Zhejiang Construction
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By analyzing existing cross correlation between Shenzhen Glory Medical and Zhejiang Construction Investment, you can compare the effects of market volatilities on Shenzhen Glory and Zhejiang Construction 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 Zhejiang Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Glory and Zhejiang Construction.
Diversification Opportunities for Shenzhen Glory and Zhejiang Construction
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Zhejiang is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Glory Medical and Zhejiang Construction Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Construction 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 Zhejiang Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Construction has no effect on the direction of Shenzhen Glory i.e., Shenzhen Glory and Zhejiang Construction go up and down completely randomly.
Pair Corralation between Shenzhen Glory and Zhejiang Construction
Assuming the 90 days trading horizon Shenzhen Glory Medical is expected to generate 0.91 times more return on investment than Zhejiang Construction. However, Shenzhen Glory Medical is 1.1 times less risky than Zhejiang Construction. It trades about -0.02 of its potential returns per unit of risk. Zhejiang Construction Investment is currently generating about -0.06 per unit of risk. If you would invest 478.00 in Shenzhen Glory Medical on October 23, 2024 and sell it today you would lose (175.00) from holding Shenzhen Glory Medical or give up 36.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Shenzhen Glory Medical vs. Zhejiang Construction Investme
Performance |
| Timeline |
| Shenzhen Glory Medical |
| Zhejiang Construction |
Shenzhen Glory and Zhejiang Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Glory and Zhejiang Construction
The main advantage of trading using opposite Shenzhen Glory and Zhejiang Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Glory position performs unexpectedly, Zhejiang Construction 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 Zhejiang Construction will offset losses from the drop in Zhejiang Construction's long position.| Shenzhen Glory vs. Zhejiang Construction Investment | Shenzhen Glory vs. Xiamen Insight Investment | Shenzhen Glory vs. China Building Material | Shenzhen Glory vs. Suzhou Xingye Material |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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