Correlation Between Shenzhen Zhongzhuang and Chenzhou Jingui
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By analyzing existing cross correlation between Shenzhen Zhongzhuang Construction and Chenzhou Jingui Silver, you can compare the effects of market volatilities on Shenzhen Zhongzhuang 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 Zhongzhuang with a short position of Chenzhou Jingui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Zhongzhuang and Chenzhou Jingui.
Diversification Opportunities for Shenzhen Zhongzhuang and Chenzhou Jingui
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shenzhen and Chenzhou is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Zhongzhuang Construct 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 Zhongzhuang 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 Zhongzhuang Construction 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 Zhongzhuang i.e., Shenzhen Zhongzhuang and Chenzhou Jingui go up and down completely randomly.
Pair Corralation between Shenzhen Zhongzhuang and Chenzhou Jingui
Assuming the 90 days trading horizon Shenzhen Zhongzhuang Construction is expected to generate 2.18 times more return on investment than Chenzhou Jingui. However, Shenzhen Zhongzhuang is 2.18 times more volatile than Chenzhou Jingui Silver. It trades about 0.16 of its potential returns per unit of risk. Chenzhou Jingui Silver is currently generating about 0.13 per unit of risk. If you would invest 349.00 in Shenzhen Zhongzhuang Construction on November 7, 2024 and sell it today you would earn a total of 31.00 from holding Shenzhen Zhongzhuang Construction or generate 8.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Zhongzhuang Construct vs. Chenzhou Jingui Silver
Performance |
| Timeline |
| Shenzhen Zhongzhuang |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Chenzhou Jingui Silver |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shenzhen Zhongzhuang and Chenzhou Jingui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Zhongzhuang and Chenzhou Jingui
The main advantage of trading using opposite Shenzhen Zhongzhuang and Chenzhou Jingui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Zhongzhuang 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 Zhongzhuang Construction 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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