Correlation Between Shenzhen SDG and Zhongzhu Medical
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By analyzing existing cross correlation between Shenzhen SDG Service and Zhongzhu Medical Holdings, you can compare the effects of market volatilities on Shenzhen SDG and Zhongzhu Medical 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 SDG with a short position of Zhongzhu Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen SDG and Zhongzhu Medical.
Diversification Opportunities for Shenzhen SDG and Zhongzhu Medical
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Zhongzhu is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen SDG Service and Zhongzhu Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongzhu Medical Holdings and Shenzhen SDG 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 SDG Service are associated (or correlated) with Zhongzhu Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongzhu Medical Holdings has no effect on the direction of Shenzhen SDG i.e., Shenzhen SDG and Zhongzhu Medical go up and down completely randomly.
Pair Corralation between Shenzhen SDG and Zhongzhu Medical
Assuming the 90 days trading horizon Shenzhen SDG Service is expected to under-perform the Zhongzhu Medical. In addition to that, Shenzhen SDG is 1.68 times more volatile than Zhongzhu Medical Holdings. It trades about -0.1 of its total potential returns per unit of risk. Zhongzhu Medical Holdings is currently generating about -0.07 per unit of volatility. If you would invest 130.00 in Zhongzhu Medical Holdings on November 1, 2024 and sell it today you would lose (4.00) from holding Zhongzhu Medical Holdings or give up 3.08% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Shenzhen SDG Service vs. Zhongzhu Medical Holdings
Performance |
Timeline |
Shenzhen SDG Service |
Zhongzhu Medical Holdings |
Shenzhen SDG and Zhongzhu Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shenzhen SDG and Zhongzhu Medical
The main advantage of trading using opposite Shenzhen SDG and Zhongzhu Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen SDG position performs unexpectedly, Zhongzhu Medical 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 Zhongzhu Medical will offset losses from the drop in Zhongzhu Medical's long position.Shenzhen SDG vs. Agricultural Bank of | Shenzhen SDG vs. Industrial and Commercial | Shenzhen SDG vs. Bank of China | Shenzhen SDG vs. China Construction Bank |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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