Correlation Between Shenzhen Silver and Zhejiang Qianjiang
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By analyzing existing cross correlation between Shenzhen Silver Basis and Zhejiang Qianjiang Motorcycle, you can compare the effects of market volatilities on Shenzhen Silver and Zhejiang Qianjiang 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 Silver with a short position of Zhejiang Qianjiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Silver and Zhejiang Qianjiang.
Diversification Opportunities for Shenzhen Silver and Zhejiang Qianjiang
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Zhejiang is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Silver Basis and Zhejiang Qianjiang Motorcycle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Qianjiang and Shenzhen Silver 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 Silver Basis are associated (or correlated) with Zhejiang Qianjiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Qianjiang has no effect on the direction of Shenzhen Silver i.e., Shenzhen Silver and Zhejiang Qianjiang go up and down completely randomly.
Pair Corralation between Shenzhen Silver and Zhejiang Qianjiang
Assuming the 90 days trading horizon Shenzhen Silver Basis is expected to under-perform the Zhejiang Qianjiang. In addition to that, Shenzhen Silver is 1.65 times more volatile than Zhejiang Qianjiang Motorcycle. It trades about -0.16 of its total potential returns per unit of risk. Zhejiang Qianjiang Motorcycle is currently generating about -0.21 per unit of volatility. If you would invest 1,870 in Zhejiang Qianjiang Motorcycle on September 13, 2024 and sell it today you would lose (164.00) from holding Zhejiang Qianjiang Motorcycle or give up 8.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Silver Basis vs. Zhejiang Qianjiang Motorcycle
Performance |
| Timeline |
| Shenzhen Silver Basis |
| Zhejiang Qianjiang |
Shenzhen Silver and Zhejiang Qianjiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Silver and Zhejiang Qianjiang
The main advantage of trading using opposite Shenzhen Silver and Zhejiang Qianjiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Silver position performs unexpectedly, Zhejiang Qianjiang 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 Qianjiang will offset losses from the drop in Zhejiang Qianjiang's long position.| Shenzhen Silver vs. Hunan Mendale Hometextile | Shenzhen Silver vs. Oppein Home Group | Shenzhen Silver vs. Chengdu Spaceon Electronics | Shenzhen Silver vs. Sanbo Hospital Management |
| Zhejiang Qianjiang vs. Xiangyu Medical Co | Zhejiang Qianjiang vs. Shenzhen Silver Basis | Zhejiang Qianjiang vs. Cowealth Medical China | Zhejiang Qianjiang vs. Shenzhen Noposion Agrochemicals |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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