Correlation Between Shenzhen Mindray and Shanghai Laimu
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By analyzing existing cross correlation between Shenzhen Mindray Bio Medical and Shanghai Laimu Electronics, you can compare the effects of market volatilities on Shenzhen Mindray and Shanghai Laimu 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 Shanghai Laimu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Mindray and Shanghai Laimu.
Diversification Opportunities for Shenzhen Mindray and Shanghai Laimu
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Shanghai is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Mindray Bio Medical and Shanghai Laimu Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Laimu Elect 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 Shanghai Laimu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Laimu Elect has no effect on the direction of Shenzhen Mindray i.e., Shenzhen Mindray and Shanghai Laimu go up and down completely randomly.
Pair Corralation between Shenzhen Mindray and Shanghai Laimu
Assuming the 90 days trading horizon Shenzhen Mindray Bio Medical is expected to under-perform the Shanghai Laimu. But the stock apears to be less risky and, when comparing its historical volatility, Shenzhen Mindray Bio Medical is 1.56 times less risky than Shanghai Laimu. The stock trades about -0.17 of its potential returns per unit of risk. The Shanghai Laimu Electronics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 810.00 in Shanghai Laimu Electronics on September 12, 2024 and sell it today you would earn a total of 14.00 from holding Shanghai Laimu Electronics or generate 1.73% 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. Shanghai Laimu Electronics
Performance |
| Timeline |
| Shenzhen Mindray Bio |
| Shanghai Laimu Elect |
Shenzhen Mindray and Shanghai Laimu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Mindray and Shanghai Laimu
The main advantage of trading using opposite Shenzhen Mindray and Shanghai Laimu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Mindray position performs unexpectedly, Shanghai Laimu 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 Shanghai Laimu will offset losses from the drop in Shanghai Laimu's long position.| Shenzhen Mindray vs. Cultural Investment Holdings | Shenzhen Mindray vs. Gome Telecom Equipment | Shenzhen Mindray vs. Holitech Technology Co | Shenzhen Mindray vs. Zotye Automobile Co |
| Shanghai Laimu vs. Shandong Iron and | Shanghai Laimu vs. Yunnan Jianzhijia Health Chain | Shanghai Laimu vs. Sanbo Hospital Management | Shanghai Laimu vs. Sinosteel Engineering and |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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