Correlation Between Jiangxi Hengda and Shenzhen Transsion
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By analyzing existing cross correlation between Jiangxi Hengda Hi Tech and Shenzhen Transsion Holdings, you can compare the effects of market volatilities on Jiangxi Hengda and Shenzhen Transsion 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 Jiangxi Hengda with a short position of Shenzhen Transsion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi Hengda and Shenzhen Transsion.
Diversification Opportunities for Jiangxi Hengda and Shenzhen Transsion
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jiangxi and Shenzhen is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Hengda Hi Tech and Shenzhen Transsion Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Transsion and Jiangxi Hengda 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 Jiangxi Hengda Hi Tech are associated (or correlated) with Shenzhen Transsion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Transsion has no effect on the direction of Jiangxi Hengda i.e., Jiangxi Hengda and Shenzhen Transsion go up and down completely randomly.
Pair Corralation between Jiangxi Hengda and Shenzhen Transsion
Assuming the 90 days trading horizon Jiangxi Hengda Hi Tech is expected to under-perform the Shenzhen Transsion. In addition to that, Jiangxi Hengda is 1.0 times more volatile than Shenzhen Transsion Holdings. It trades about -0.02 of its total potential returns per unit of risk. Shenzhen Transsion Holdings is currently generating about -0.01 per unit of volatility. If you would invest 12,530 in Shenzhen Transsion Holdings on September 12, 2024 and sell it today you would lose (3,129) from holding Shenzhen Transsion Holdings or give up 24.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangxi Hengda Hi Tech vs. Shenzhen Transsion Holdings
Performance |
| Timeline |
| Jiangxi Hengda Hi |
| Shenzhen Transsion |
Jiangxi Hengda and Shenzhen Transsion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangxi Hengda and Shenzhen Transsion
The main advantage of trading using opposite Jiangxi Hengda and Shenzhen Transsion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi Hengda position performs unexpectedly, Shenzhen Transsion 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 Transsion will offset losses from the drop in Shenzhen Transsion's long position.| Jiangxi Hengda vs. Zijin Mining Group | Jiangxi Hengda vs. Wanhua Chemical Group | Jiangxi Hengda vs. Baoshan Iron Steel | Jiangxi Hengda vs. Rongsheng Petrochemical Co |
| Shenzhen Transsion vs. State Grid InformationCommunication | Shenzhen Transsion vs. Saurer Intelligent Technology | Shenzhen Transsion vs. Changchun UP Optotech | Shenzhen Transsion vs. Jiangxi Hengda 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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