Correlation Between Contemporary Amperex and Shenzhen Mindray
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By analyzing existing cross correlation between Contemporary Amperex Technology and Shenzhen Mindray Bio Medical, you can compare the effects of market volatilities on Contemporary Amperex 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 Contemporary Amperex with a short position of Shenzhen Mindray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Contemporary Amperex and Shenzhen Mindray.
Diversification Opportunities for Contemporary Amperex and Shenzhen Mindray
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Contemporary and Shenzhen is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Contemporary Amperex Technolog 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 Contemporary Amperex 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 Contemporary Amperex Technology 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 Contemporary Amperex i.e., Contemporary Amperex and Shenzhen Mindray go up and down completely randomly.
Pair Corralation between Contemporary Amperex and Shenzhen Mindray
Assuming the 90 days trading horizon Contemporary Amperex Technology is expected to generate 1.26 times more return on investment than Shenzhen Mindray. However, Contemporary Amperex is 1.26 times more volatile than Shenzhen Mindray Bio Medical. It trades about 0.01 of its potential returns per unit of risk. Shenzhen Mindray Bio Medical is currently generating about -0.08 per unit of risk. If you would invest 25,624 in Contemporary Amperex Technology on August 29, 2024 and sell it today you would earn a total of 48.00 from holding Contemporary Amperex Technology or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Contemporary Amperex Technolog vs. Shenzhen Mindray Bio Medical
Performance |
| Timeline |
| Contemporary Amperex |
| Shenzhen Mindray Bio |
Contemporary Amperex and Shenzhen Mindray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Contemporary Amperex and Shenzhen Mindray
The main advantage of trading using opposite Contemporary Amperex and Shenzhen Mindray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contemporary Amperex 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.The idea behind Contemporary Amperex Technology and Shenzhen Mindray Bio Medical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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