Correlation Between Shenzhen Mindray and Contemporary Amperex
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By analyzing existing cross correlation between Shenzhen Mindray Bio Medical and Contemporary Amperex Technology, you can compare the effects of market volatilities on Shenzhen Mindray and Contemporary Amperex 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 Contemporary Amperex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Mindray and Contemporary Amperex.
Diversification Opportunities for Shenzhen Mindray and Contemporary Amperex
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Contemporary is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Mindray Bio Medical and Contemporary Amperex Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contemporary Amperex 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 Contemporary Amperex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contemporary Amperex has no effect on the direction of Shenzhen Mindray i.e., Shenzhen Mindray and Contemporary Amperex go up and down completely randomly.
Pair Corralation between Shenzhen Mindray and Contemporary Amperex
Assuming the 90 days trading horizon Shenzhen Mindray Bio Medical is expected to under-perform the Contemporary Amperex. But the stock apears to be less risky and, when comparing its historical volatility, Shenzhen Mindray Bio Medical is 1.26 times less risky than Contemporary Amperex. The stock trades about -0.08 of its potential returns per unit of risk. The Contemporary Amperex Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. 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 |
Shenzhen Mindray Bio Medical vs. Contemporary Amperex Technolog
Performance |
| Timeline |
| Shenzhen Mindray Bio |
| Contemporary Amperex |
Shenzhen Mindray and Contemporary Amperex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Mindray and Contemporary Amperex
The main advantage of trading using opposite Shenzhen Mindray and Contemporary Amperex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Mindray position performs unexpectedly, Contemporary Amperex 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 Contemporary Amperex will offset losses from the drop in Contemporary Amperex's long position.| Shenzhen Mindray vs. Xinjiang Baodi Mining | Shenzhen Mindray vs. Huaibei Mining Holdings | Shenzhen Mindray vs. Jilin Chemical Fibre | Shenzhen Mindray vs. Guizhou Chanhen Chemical |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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