Correlation Between Shenzhen Bingchuan and Guangdong Shenglu
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By analyzing existing cross correlation between Shenzhen Bingchuan Network and Guangdong Shenglu Telecommunication, you can compare the effects of market volatilities on Shenzhen Bingchuan and Guangdong Shenglu 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 Bingchuan with a short position of Guangdong Shenglu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Bingchuan and Guangdong Shenglu.
Diversification Opportunities for Shenzhen Bingchuan and Guangdong Shenglu
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenzhen and Guangdong is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Bingchuan Network and Guangdong Shenglu Telecommunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Shenglu and Shenzhen Bingchuan 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 Bingchuan Network are associated (or correlated) with Guangdong Shenglu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Shenglu has no effect on the direction of Shenzhen Bingchuan i.e., Shenzhen Bingchuan and Guangdong Shenglu go up and down completely randomly.
Pair Corralation between Shenzhen Bingchuan and Guangdong Shenglu
Assuming the 90 days trading horizon Shenzhen Bingchuan Network is expected to generate 1.3 times more return on investment than Guangdong Shenglu. However, Shenzhen Bingchuan is 1.3 times more volatile than Guangdong Shenglu Telecommunication. It trades about 0.01 of its potential returns per unit of risk. Guangdong Shenglu Telecommunication is currently generating about -0.03 per unit of risk. If you would invest 2,554 in Shenzhen Bingchuan Network on August 25, 2024 and sell it today you would lose (358.00) from holding Shenzhen Bingchuan Network or give up 14.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Bingchuan Network vs. Guangdong Shenglu Telecommunic
Performance |
| Timeline |
| Shenzhen Bingchuan |
| Guangdong Shenglu |
Shenzhen Bingchuan and Guangdong Shenglu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Bingchuan and Guangdong Shenglu
The main advantage of trading using opposite Shenzhen Bingchuan and Guangdong Shenglu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Bingchuan position performs unexpectedly, Guangdong Shenglu 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 Guangdong Shenglu will offset losses from the drop in Guangdong Shenglu's long position.| Shenzhen Bingchuan vs. Ming Yang Smart | Shenzhen Bingchuan vs. 159681 | Shenzhen Bingchuan vs. 159005 | Shenzhen Bingchuan vs. Loctek Ergonomic Technology |
| Guangdong Shenglu vs. Shenzhen MYS Environmental | Guangdong Shenglu vs. AVIC Fund Management | Guangdong Shenglu vs. Shenzhen Bingchuan Network | Guangdong Shenglu vs. Penghua Shenzhen Energy |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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