Correlation Between Guangdong Wens and Shenzhen Sunlord
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By analyzing existing cross correlation between Guangdong Wens Foodstuff and Shenzhen Sunlord Electronics, you can compare the effects of market volatilities on Guangdong Wens and Shenzhen Sunlord 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 Guangdong Wens with a short position of Shenzhen Sunlord. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Wens and Shenzhen Sunlord.
Diversification Opportunities for Guangdong Wens and Shenzhen Sunlord
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Shenzhen is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Wens Foodstuff and Shenzhen Sunlord Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Sunlord Ele and Guangdong Wens 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 Guangdong Wens Foodstuff are associated (or correlated) with Shenzhen Sunlord. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Sunlord Ele has no effect on the direction of Guangdong Wens i.e., Guangdong Wens and Shenzhen Sunlord go up and down completely randomly.
Pair Corralation between Guangdong Wens and Shenzhen Sunlord
Assuming the 90 days trading horizon Guangdong Wens Foodstuff is expected to under-perform the Shenzhen Sunlord. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Wens Foodstuff is 1.0 times less risky than Shenzhen Sunlord. The stock trades about -0.01 of its potential returns per unit of risk. The Shenzhen Sunlord Electronics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,658 in Shenzhen Sunlord Electronics on September 3, 2024 and sell it today you would earn a total of 448.00 from holding Shenzhen Sunlord Electronics or generate 16.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Wens Foodstuff vs. Shenzhen Sunlord Electronics
Performance |
| Timeline |
| Guangdong Wens Foodstuff |
| Shenzhen Sunlord Ele |
Guangdong Wens and Shenzhen Sunlord Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Wens and Shenzhen Sunlord
The main advantage of trading using opposite Guangdong Wens and Shenzhen Sunlord positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Wens position performs unexpectedly, Shenzhen Sunlord 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 Sunlord will offset losses from the drop in Shenzhen Sunlord's long position.| Guangdong Wens vs. Beijing Wantai Biological | Guangdong Wens vs. Aluminum Corp of | Guangdong Wens vs. COL Digital Publishing | Guangdong Wens vs. Shaanxi Meineng Clean |
| Shenzhen Sunlord vs. Semiconductor Manufacturing Electronics | Shenzhen Sunlord vs. Eastroc Beverage Group | Shenzhen Sunlord vs. Chongqing Brewery Co | Shenzhen Sunlord vs. Jinling Hotel Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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