Correlation Between Shenzhen Silver and Jiangsu GDK
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By analyzing existing cross correlation between Shenzhen Silver Basis and Jiangsu GDK Biotechnology, you can compare the effects of market volatilities on Shenzhen Silver and Jiangsu GDK 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 Jiangsu GDK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Silver and Jiangsu GDK.
Diversification Opportunities for Shenzhen Silver and Jiangsu GDK
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Jiangsu is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Silver Basis and Jiangsu GDK Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu GDK Biotechnology 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 Jiangsu GDK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu GDK Biotechnology has no effect on the direction of Shenzhen Silver i.e., Shenzhen Silver and Jiangsu GDK go up and down completely randomly.
Pair Corralation between Shenzhen Silver and Jiangsu GDK
Assuming the 90 days trading horizon Shenzhen Silver Basis is expected to generate 0.92 times more return on investment than Jiangsu GDK. However, Shenzhen Silver Basis is 1.09 times less risky than Jiangsu GDK. It trades about 0.07 of its potential returns per unit of risk. Jiangsu GDK Biotechnology is currently generating about 0.04 per unit of risk. If you would invest 797.00 in Shenzhen Silver Basis on September 25, 2024 and sell it today you would earn a total of 229.00 from holding Shenzhen Silver Basis or generate 28.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Silver Basis vs. Jiangsu GDK Biotechnology
Performance |
| Timeline |
| Shenzhen Silver Basis |
| Jiangsu GDK Biotechnology |
Shenzhen Silver and Jiangsu GDK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Silver and Jiangsu GDK
The main advantage of trading using opposite Shenzhen Silver and Jiangsu GDK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Silver position performs unexpectedly, Jiangsu GDK 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 Jiangsu GDK will offset losses from the drop in Jiangsu GDK's long position.| Shenzhen Silver vs. Bank of China | Shenzhen Silver vs. Kweichow Moutai Co | Shenzhen Silver vs. PetroChina Co Ltd | Shenzhen Silver vs. Bank of Communications |
| Jiangsu GDK vs. Hubeiyichang Transportation Group | Jiangsu GDK vs. Xinjiang Baodi Mining | Jiangsu GDK vs. Shanghai Rongtai Health | Jiangsu GDK vs. Shenzhen Silver Basis |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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