Correlation Between Hangzhou Gaoxin and Shenzhen Mindray
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By analyzing existing cross correlation between Hangzhou Gaoxin Rubber and Shenzhen Mindray Bio Medical, you can compare the effects of market volatilities on Hangzhou Gaoxin and Shenzhen Mindray 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 Hangzhou Gaoxin with a short position of Shenzhen Mindray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Gaoxin and Shenzhen Mindray.
Diversification Opportunities for Hangzhou Gaoxin and Shenzhen Mindray
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hangzhou and Shenzhen is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Gaoxin Rubber and Shenzhen Mindray Bio Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Mindray Bio and Hangzhou Gaoxin 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 Hangzhou Gaoxin Rubber are associated (or correlated) with Shenzhen Mindray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Mindray Bio has no effect on the direction of Hangzhou Gaoxin i.e., Hangzhou Gaoxin and Shenzhen Mindray go up and down completely randomly.
Pair Corralation between Hangzhou Gaoxin and Shenzhen Mindray
Assuming the 90 days trading horizon Hangzhou Gaoxin Rubber is expected to generate 1.73 times more return on investment than Shenzhen Mindray. However, Hangzhou Gaoxin is 1.73 times more volatile than Shenzhen Mindray Bio Medical. It trades about 0.02 of its potential returns per unit of risk. Shenzhen Mindray Bio Medical is currently generating about 0.0 per unit of risk. If you would invest 1,015 in Hangzhou Gaoxin Rubber on September 4, 2024 and sell it today you would earn a total of 84.00 from holding Hangzhou Gaoxin Rubber or generate 8.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hangzhou Gaoxin Rubber vs. Shenzhen Mindray Bio Medical
Performance |
| Timeline |
| Hangzhou Gaoxin Rubber |
| Shenzhen Mindray Bio |
Hangzhou Gaoxin and Shenzhen Mindray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hangzhou Gaoxin and Shenzhen Mindray
The main advantage of trading using opposite Hangzhou Gaoxin and Shenzhen Mindray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Gaoxin position performs unexpectedly, Shenzhen Mindray 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 Mindray will offset losses from the drop in Shenzhen Mindray's long position.| Hangzhou Gaoxin vs. Zijin Mining Group | Hangzhou Gaoxin vs. Wanhua Chemical Group | Hangzhou Gaoxin vs. Baoshan Iron Steel | Hangzhou Gaoxin vs. Rongsheng Petrochemical Co |
| Shenzhen Mindray vs. Hangzhou Gaoxin Rubber | Shenzhen Mindray vs. Guangzhou Tinci Materials | Shenzhen Mindray vs. Huatian Hotel Group | Shenzhen Mindray vs. Xinke Material |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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