Correlation Between Shenzhen Zhongzhuang and Guizhou Chanhen
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By analyzing existing cross correlation between Shenzhen Zhongzhuang Construction and Guizhou Chanhen Chemical, you can compare the effects of market volatilities on Shenzhen Zhongzhuang and Guizhou Chanhen 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 Guizhou Chanhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Zhongzhuang and Guizhou Chanhen.
Diversification Opportunities for Shenzhen Zhongzhuang and Guizhou Chanhen
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shenzhen and Guizhou is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Zhongzhuang Construct and Guizhou Chanhen Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guizhou Chanhen Chemical 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 Guizhou Chanhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guizhou Chanhen Chemical has no effect on the direction of Shenzhen Zhongzhuang i.e., Shenzhen Zhongzhuang and Guizhou Chanhen go up and down completely randomly.
Pair Corralation between Shenzhen Zhongzhuang and Guizhou Chanhen
Assuming the 90 days trading horizon Shenzhen Zhongzhuang Construction is expected to generate 1.3 times more return on investment than Guizhou Chanhen. However, Shenzhen Zhongzhuang is 1.3 times more volatile than Guizhou Chanhen Chemical. It trades about 0.0 of its potential returns per unit of risk. Guizhou Chanhen Chemical is currently generating about 0.0 per unit of risk. If you would invest 504.00 in Shenzhen Zhongzhuang Construction on November 1, 2024 and sell it today you would lose (124.00) from holding Shenzhen Zhongzhuang Construction or give up 24.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Zhongzhuang Construct vs. Guizhou Chanhen Chemical
Performance |
| Timeline |
| Shenzhen Zhongzhuang |
| Guizhou Chanhen Chemical |
Shenzhen Zhongzhuang and Guizhou Chanhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Zhongzhuang and Guizhou Chanhen
The main advantage of trading using opposite Shenzhen Zhongzhuang and Guizhou Chanhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Zhongzhuang position performs unexpectedly, Guizhou Chanhen 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 Guizhou Chanhen will offset losses from the drop in Guizhou Chanhen's long position.| Shenzhen Zhongzhuang vs. Qingdao Hiron Commercial | Shenzhen Zhongzhuang vs. Shaanxi Broadcast TV | Shenzhen Zhongzhuang vs. Hainan Haiqi Transportation | Shenzhen Zhongzhuang vs. Zhongshan Broad Ocean Motor |
| Guizhou Chanhen vs. Eastroc Beverage Group | Guizhou Chanhen vs. Anji Foodstuff Co | Guizhou Chanhen vs. Youyou Foods Co | Guizhou Chanhen vs. Humanwell Healthcare Group |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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