Correlation Between Shenzhen Mindray and Railway Signal
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By analyzing existing cross correlation between Shenzhen Mindray Bio Medical and Railway Signal Communication, you can compare the effects of market volatilities on Shenzhen Mindray and Railway Signal 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 Railway Signal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Mindray and Railway Signal.
Diversification Opportunities for Shenzhen Mindray and Railway Signal
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Railway is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Mindray Bio Medical and Railway Signal Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Railway Signal Commu 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 Railway Signal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Railway Signal Commu has no effect on the direction of Shenzhen Mindray i.e., Shenzhen Mindray and Railway Signal go up and down completely randomly.
Pair Corralation between Shenzhen Mindray and Railway Signal
Assuming the 90 days trading horizon Shenzhen Mindray Bio Medical is expected to under-perform the Railway Signal. But the stock apears to be less risky and, when comparing its historical volatility, Shenzhen Mindray Bio Medical is 1.0 times less risky than Railway Signal. The stock trades about -0.01 of its potential returns per unit of risk. The Railway Signal Communication is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 604.00 in Railway Signal Communication on September 27, 2024 and sell it today you would earn a total of 16.00 from holding Railway Signal Communication or generate 2.65% 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. Railway Signal Communication
Performance |
| Timeline |
| Shenzhen Mindray Bio |
| Railway Signal Commu |
Shenzhen Mindray and Railway Signal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Mindray and Railway Signal
The main advantage of trading using opposite Shenzhen Mindray and Railway Signal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Mindray position performs unexpectedly, Railway Signal 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 Railway Signal will offset losses from the drop in Railway Signal's long position.| Shenzhen Mindray vs. Songz Automobile Air | Shenzhen Mindray vs. Fiberhome Telecommunication Technologies | Shenzhen Mindray vs. Everdisplay Optronics Shanghai | Shenzhen Mindray vs. Jiangsu Jinling Sports |
| Railway Signal vs. Kweichow Moutai Co | Railway Signal vs. Shenzhen Mindray Bio Medical | Railway Signal vs. Jiangsu Pacific Quartz | Railway Signal vs. G bits Network Technology |
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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