Correlation Between Shenzhen Mindray and China Three
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By analyzing existing cross correlation between Shenzhen Mindray Bio Medical and China Three Gorges, you can compare the effects of market volatilities on Shenzhen Mindray and China Three 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 China Three. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Mindray and China Three.
Diversification Opportunities for Shenzhen Mindray and China Three
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and China is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Mindray Bio Medical and China Three Gorges in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Three Gorges 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 China Three. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Three Gorges has no effect on the direction of Shenzhen Mindray i.e., Shenzhen Mindray and China Three go up and down completely randomly.
Pair Corralation between Shenzhen Mindray and China Three
Assuming the 90 days trading horizon Shenzhen Mindray Bio Medical is expected to under-perform the China Three. In addition to that, Shenzhen Mindray is 1.58 times more volatile than China Three Gorges. It trades about 0.0 of its total potential returns per unit of risk. China Three Gorges is currently generating about 0.01 per unit of volatility. If you would invest 454.00 in China Three Gorges on August 27, 2024 and sell it today you would earn a total of 5.00 from holding China Three Gorges or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Mindray Bio Medical vs. China Three Gorges
Performance |
| Timeline |
| Shenzhen Mindray Bio |
| China Three Gorges |
Shenzhen Mindray and China Three Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Mindray and China Three
The main advantage of trading using opposite Shenzhen Mindray and China Three positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Mindray position performs unexpectedly, China Three 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 China Three will offset losses from the drop in China Three's long position.| Shenzhen Mindray vs. Xinjiang Baodi Mining | Shenzhen Mindray vs. Dareway Software Co | Shenzhen Mindray vs. Hainan Mining Co | Shenzhen Mindray vs. Glodon Software Co |
| China Three vs. Guangzhou KingTeller Technology | China Three vs. Cicc Fund Management | China Three vs. ROPEOK Technology Group | China Three vs. Kuangda Technology Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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