Correlation Between Shenzhen Zhongzhuang and Shanghai Construction
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By analyzing existing cross correlation between Shenzhen Zhongzhuang Construction and Shanghai Construction Group, you can compare the effects of market volatilities on Shenzhen Zhongzhuang and Shanghai Construction 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 Shanghai Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Zhongzhuang and Shanghai Construction.
Diversification Opportunities for Shenzhen Zhongzhuang and Shanghai Construction
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Shanghai is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Zhongzhuang Construct and Shanghai Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Construction 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 Shanghai Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Construction has no effect on the direction of Shenzhen Zhongzhuang i.e., Shenzhen Zhongzhuang and Shanghai Construction go up and down completely randomly.
Pair Corralation between Shenzhen Zhongzhuang and Shanghai Construction
Assuming the 90 days trading horizon Shenzhen Zhongzhuang Construction is expected to generate 1.4 times more return on investment than Shanghai Construction. However, Shenzhen Zhongzhuang is 1.4 times more volatile than Shanghai Construction Group. It trades about 0.12 of its potential returns per unit of risk. Shanghai Construction Group is currently generating about 0.12 per unit of risk. If you would invest 378.00 in Shenzhen Zhongzhuang Construction on November 29, 2024 and sell it today you would earn a total of 15.00 from holding Shenzhen Zhongzhuang Construction or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Zhongzhuang Construct vs. Shanghai Construction Group
Performance |
| Timeline |
| Shenzhen Zhongzhuang |
| Shanghai Construction |
Shenzhen Zhongzhuang and Shanghai Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Zhongzhuang and Shanghai Construction
The main advantage of trading using opposite Shenzhen Zhongzhuang and Shanghai Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Zhongzhuang position performs unexpectedly, Shanghai Construction 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 Shanghai Construction will offset losses from the drop in Shanghai Construction's long position.| Shenzhen Zhongzhuang vs. Offcn Education Technology | Shenzhen Zhongzhuang vs. Xiamen Jihong Package | Shenzhen Zhongzhuang vs. Duzhe Publishing Media | Shenzhen Zhongzhuang vs. Jiangsu Phoenix Publishing |
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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