Correlation Between Shenzhen Zhongzhuang and Hubei Xingfa
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By analyzing existing cross correlation between Shenzhen Zhongzhuang Construction and Hubei Xingfa Chemicals, you can compare the effects of market volatilities on Shenzhen Zhongzhuang and Hubei Xingfa 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 Hubei Xingfa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Zhongzhuang and Hubei Xingfa.
Diversification Opportunities for Shenzhen Zhongzhuang and Hubei Xingfa
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shenzhen and Hubei is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Zhongzhuang Construct and Hubei Xingfa Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Xingfa Chemicals 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 Hubei Xingfa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Xingfa Chemicals has no effect on the direction of Shenzhen Zhongzhuang i.e., Shenzhen Zhongzhuang and Hubei Xingfa go up and down completely randomly.
Pair Corralation between Shenzhen Zhongzhuang and Hubei Xingfa
Assuming the 90 days trading horizon Shenzhen Zhongzhuang Construction is expected to under-perform the Hubei Xingfa. In addition to that, Shenzhen Zhongzhuang is 2.77 times more volatile than Hubei Xingfa Chemicals. It trades about -0.44 of its total potential returns per unit of risk. Hubei Xingfa Chemicals is currently generating about -0.34 per unit of volatility. If you would invest 2,271 in Hubei Xingfa Chemicals on October 14, 2024 and sell it today you would lose (182.00) from holding Hubei Xingfa Chemicals or give up 8.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Zhongzhuang Construct vs. Hubei Xingfa Chemicals
Performance |
| Timeline |
| Shenzhen Zhongzhuang |
| Hubei Xingfa Chemicals |
Shenzhen Zhongzhuang and Hubei Xingfa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Zhongzhuang and Hubei Xingfa
The main advantage of trading using opposite Shenzhen Zhongzhuang and Hubei Xingfa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Zhongzhuang position performs unexpectedly, Hubei Xingfa 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 Hubei Xingfa will offset losses from the drop in Hubei Xingfa's long position.| Shenzhen Zhongzhuang vs. Montage Technology Co | Shenzhen Zhongzhuang vs. Linewell Software Co | Shenzhen Zhongzhuang vs. Kuang Chi Technologies | Shenzhen Zhongzhuang vs. Bosera CMSK Industrial |
| Hubei Xingfa vs. Keda Clean Energy | Hubei Xingfa vs. Shenzhen Zhongzhuang Construction | Hubei Xingfa vs. Nanxing Furniture Machinery | Hubei Xingfa vs. Shaanxi Meineng Clean |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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