Correlation Between Shenzhen Zhongzhuang and Tengda Construction
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By analyzing existing cross correlation between Shenzhen Zhongzhuang Construction and Tengda Construction Group, you can compare the effects of market volatilities on Shenzhen Zhongzhuang and Tengda 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 Tengda Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Zhongzhuang and Tengda Construction.
Diversification Opportunities for Shenzhen Zhongzhuang and Tengda Construction
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Tengda is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Zhongzhuang Construct and Tengda Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tengda 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 Tengda Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tengda Construction has no effect on the direction of Shenzhen Zhongzhuang i.e., Shenzhen Zhongzhuang and Tengda Construction go up and down completely randomly.
Pair Corralation between Shenzhen Zhongzhuang and Tengda Construction
Assuming the 90 days trading horizon Shenzhen Zhongzhuang Construction is expected to generate 1.81 times more return on investment than Tengda Construction. However, Shenzhen Zhongzhuang is 1.81 times more volatile than Tengda Construction Group. It trades about 0.01 of its potential returns per unit of risk. Tengda Construction Group is currently generating about -0.01 per unit of risk. If you would invest 455.00 in Shenzhen Zhongzhuang Construction on August 31, 2024 and sell it today you would lose (44.00) from holding Shenzhen Zhongzhuang Construction or give up 9.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Zhongzhuang Construct vs. Tengda Construction Group
Performance |
| Timeline |
| Shenzhen Zhongzhuang |
| Tengda Construction |
Shenzhen Zhongzhuang and Tengda Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Zhongzhuang and Tengda Construction
The main advantage of trading using opposite Shenzhen Zhongzhuang and Tengda Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Zhongzhuang position performs unexpectedly, Tengda 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 Tengda Construction will offset losses from the drop in Tengda Construction's long position.| Shenzhen Zhongzhuang vs. Cultural Investment Holdings | Shenzhen Zhongzhuang vs. Gome Telecom Equipment | Shenzhen Zhongzhuang vs. Bus Online Co | Shenzhen Zhongzhuang vs. Holitech Technology Co |
| Tengda Construction vs. Cultural Investment Holdings | Tengda Construction vs. Gome Telecom Equipment | Tengda Construction vs. Bus Online Co | Tengda Construction vs. Holitech Technology Co |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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