Correlation Between Shenzhen Zhongzhuang and Jinsanjiang Silicon
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By analyzing existing cross correlation between Shenzhen Zhongzhuang Construction and Jinsanjiang Silicon Material, you can compare the effects of market volatilities on Shenzhen Zhongzhuang and Jinsanjiang Silicon 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 Jinsanjiang Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Zhongzhuang and Jinsanjiang Silicon.
Diversification Opportunities for Shenzhen Zhongzhuang and Jinsanjiang Silicon
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shenzhen and Jinsanjiang is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Zhongzhuang Construct and Jinsanjiang Silicon Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinsanjiang Silicon 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 Jinsanjiang Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinsanjiang Silicon has no effect on the direction of Shenzhen Zhongzhuang i.e., Shenzhen Zhongzhuang and Jinsanjiang Silicon go up and down completely randomly.
Pair Corralation between Shenzhen Zhongzhuang and Jinsanjiang Silicon
Assuming the 90 days trading horizon Shenzhen Zhongzhuang Construction is expected to under-perform the Jinsanjiang Silicon. But the stock apears to be less risky and, when comparing its historical volatility, Shenzhen Zhongzhuang Construction is 1.69 times less risky than Jinsanjiang Silicon. The stock trades about -0.41 of its potential returns per unit of risk. The Jinsanjiang Silicon Material is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,142 in Jinsanjiang Silicon Material on October 11, 2024 and sell it today you would lose (97.00) from holding Jinsanjiang Silicon Material or give up 8.49% 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. Jinsanjiang Silicon Material
Performance |
Timeline |
Shenzhen Zhongzhuang |
Jinsanjiang Silicon |
Shenzhen Zhongzhuang and Jinsanjiang Silicon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shenzhen Zhongzhuang and Jinsanjiang Silicon
The main advantage of trading using opposite Shenzhen Zhongzhuang and Jinsanjiang Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Zhongzhuang position performs unexpectedly, Jinsanjiang Silicon 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 Jinsanjiang Silicon will offset losses from the drop in Jinsanjiang Silicon's long position.Shenzhen Zhongzhuang vs. Nuode Investment Co | Shenzhen Zhongzhuang vs. Chengdu Xingrong Investment | Shenzhen Zhongzhuang vs. China Asset Management | Shenzhen Zhongzhuang vs. Hubei Geoway Investment |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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