Correlation Between New Hope and Shenzhen Inovance
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By analyzing existing cross correlation between New Hope Dairy and Shenzhen Inovance Tech, you can compare the effects of market volatilities on New Hope and Shenzhen Inovance 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 New Hope with a short position of Shenzhen Inovance. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Hope and Shenzhen Inovance.
Diversification Opportunities for New Hope and Shenzhen Inovance
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between New and Shenzhen is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding New Hope Dairy and Shenzhen Inovance Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Inovance Tech and New Hope 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 New Hope Dairy are associated (or correlated) with Shenzhen Inovance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Inovance Tech has no effect on the direction of New Hope i.e., New Hope and Shenzhen Inovance go up and down completely randomly.
Pair Corralation between New Hope and Shenzhen Inovance
Assuming the 90 days trading horizon New Hope is expected to generate 1.14 times less return on investment than Shenzhen Inovance. But when comparing it to its historical volatility, New Hope Dairy is 1.13 times less risky than Shenzhen Inovance. It trades about 0.02 of its potential returns per unit of risk. Shenzhen Inovance Tech is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 6,008 in Shenzhen Inovance Tech on October 30, 2024 and sell it today you would earn a total of 11.00 from holding Shenzhen Inovance Tech or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
New Hope Dairy vs. Shenzhen Inovance Tech
Performance |
| Timeline |
| New Hope Dairy |
| Shenzhen Inovance Tech |
New Hope and Shenzhen Inovance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Hope and Shenzhen Inovance
The main advantage of trading using opposite New Hope and Shenzhen Inovance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Hope position performs unexpectedly, Shenzhen Inovance 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 Shenzhen Inovance will offset losses from the drop in Shenzhen Inovance's long position.| New Hope vs. Lier Chemical Co | New Hope vs. Maoming Petro Chemical Shihua | New Hope vs. Hengli Petrochemical Co | New Hope vs. Liuzhou Chemical Industry |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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