Correlation Between Shenzhen Zhongzhuang and Danhua Chemical
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By analyzing existing cross correlation between Shenzhen Zhongzhuang Construction and Danhua Chemical Technology, you can compare the effects of market volatilities on Shenzhen Zhongzhuang and Danhua Chemical 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 Danhua Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Zhongzhuang and Danhua Chemical.
Diversification Opportunities for Shenzhen Zhongzhuang and Danhua Chemical
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenzhen and Danhua is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Zhongzhuang Construct and Danhua Chemical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danhua Chemical Tech 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 Danhua Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danhua Chemical Tech has no effect on the direction of Shenzhen Zhongzhuang i.e., Shenzhen Zhongzhuang and Danhua Chemical go up and down completely randomly.
Pair Corralation between Shenzhen Zhongzhuang and Danhua Chemical
Assuming the 90 days trading horizon Shenzhen Zhongzhuang Construction is expected to generate 0.84 times more return on investment than Danhua Chemical. However, Shenzhen Zhongzhuang Construction is 1.19 times less risky than Danhua Chemical. It trades about 0.47 of its potential returns per unit of risk. Danhua Chemical Technology is currently generating about 0.18 per unit of risk. If you would invest 179.00 in Shenzhen Zhongzhuang Construction on September 4, 2024 and sell it today you would earn a total of 234.00 from holding Shenzhen Zhongzhuang Construction or generate 130.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Zhongzhuang Construct vs. Danhua Chemical Technology
Performance |
| Timeline |
| Shenzhen Zhongzhuang |
| Danhua Chemical Tech |
Shenzhen Zhongzhuang and Danhua Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Zhongzhuang and Danhua Chemical
The main advantage of trading using opposite Shenzhen Zhongzhuang and Danhua Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Zhongzhuang position performs unexpectedly, Danhua Chemical 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 Danhua Chemical will offset losses from the drop in Danhua Chemical's long position.| Shenzhen Zhongzhuang vs. Peoples Insurance of | Shenzhen Zhongzhuang vs. Longjian Road Bridge | Shenzhen Zhongzhuang vs. Broadex Technologies Co | Shenzhen Zhongzhuang vs. Xinjiang Beixin RoadBridge |
| Danhua Chemical vs. Sinomach General Machinery | Danhua Chemical vs. Shenzhen Zhongzhuang Construction | Danhua Chemical vs. Tengda Construction Group | Danhua Chemical vs. Anhui Huilong Agricultural |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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