Correlation Between Shenzhen Mindray and Suzhou TAA
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By analyzing existing cross correlation between Shenzhen Mindray Bio Medical and Suzhou TAA Ultra, you can compare the effects of market volatilities on Shenzhen Mindray and Suzhou TAA 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 Mindray with a short position of Suzhou TAA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Mindray and Suzhou TAA.
Diversification Opportunities for Shenzhen Mindray and Suzhou TAA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shenzhen and Suzhou is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Mindray Bio Medical and Suzhou TAA Ultra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou TAA Ultra and Shenzhen Mindray 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 Mindray Bio Medical are associated (or correlated) with Suzhou TAA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou TAA Ultra has no effect on the direction of Shenzhen Mindray i.e., Shenzhen Mindray and Suzhou TAA go up and down completely randomly.
Pair Corralation between Shenzhen Mindray and Suzhou TAA
Assuming the 90 days trading horizon Shenzhen Mindray Bio Medical is expected to generate 0.69 times more return on investment than Suzhou TAA. However, Shenzhen Mindray Bio Medical is 1.45 times less risky than Suzhou TAA. It trades about -0.02 of its potential returns per unit of risk. Suzhou TAA Ultra is currently generating about -0.05 per unit of risk. If you would invest 30,802 in Shenzhen Mindray Bio Medical on November 9, 2024 and sell it today you would lose (6,802) from holding Shenzhen Mindray Bio Medical or give up 22.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 65.26% |
| Values | Daily Returns |
Shenzhen Mindray Bio Medical vs. Suzhou TAA Ultra
Performance |
| Timeline |
| Shenzhen Mindray Bio |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Suzhou TAA Ultra |
Risk-Adjusted Performance
Excellent
Weak | Strong |
Shenzhen Mindray and Suzhou TAA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Mindray and Suzhou TAA
The main advantage of trading using opposite Shenzhen Mindray and Suzhou TAA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Mindray position performs unexpectedly, Suzhou TAA 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 Suzhou TAA will offset losses from the drop in Suzhou TAA's long position.The idea behind Shenzhen Mindray Bio Medical and Suzhou TAA Ultra 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.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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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