Correlation Between Shenzhen and ChengDu Hi
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By analyzing existing cross correlation between Shenzhen AV Display Co and ChengDu Hi Tech Development, you can compare the effects of market volatilities on Shenzhen and ChengDu Hi 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 with a short position of ChengDu Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen and ChengDu Hi.
Diversification Opportunities for Shenzhen and ChengDu Hi
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and ChengDu is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen AV Display Co and ChengDu Hi Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChengDu Hi Tech and Shenzhen 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 AV Display Co are associated (or correlated) with ChengDu Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChengDu Hi Tech has no effect on the direction of Shenzhen i.e., Shenzhen and ChengDu Hi go up and down completely randomly.
Pair Corralation between Shenzhen and ChengDu Hi
Assuming the 90 days trading horizon Shenzhen AV Display Co is expected to generate 1.06 times more return on investment than ChengDu Hi. However, Shenzhen is 1.06 times more volatile than ChengDu Hi Tech Development. It trades about 0.18 of its potential returns per unit of risk. ChengDu Hi Tech Development is currently generating about -0.11 per unit of risk. If you would invest 3,040 in Shenzhen AV Display Co on September 3, 2024 and sell it today you would earn a total of 387.00 from holding Shenzhen AV Display Co or generate 12.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen AV Display Co vs. ChengDu Hi Tech Development
Performance |
| Timeline |
| Shenzhen AV Display |
| ChengDu Hi Tech |
Shenzhen and ChengDu Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen and ChengDu Hi
The main advantage of trading using opposite Shenzhen and ChengDu Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen position performs unexpectedly, ChengDu Hi 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 ChengDu Hi will offset losses from the drop in ChengDu Hi's long position.| Shenzhen vs. Beijing SPC Environment | Shenzhen vs. Sinocat Environmental Technology | Shenzhen vs. Pengxin International Mining | Shenzhen vs. Minmetals Capital Co |
| ChengDu Hi vs. Industrial and Commercial | ChengDu Hi vs. China Construction Bank | ChengDu Hi vs. Bank of China | ChengDu Hi vs. Agricultural Bank of |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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