Correlation Between Shenzhen and Dongguan Tarry
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By analyzing existing cross correlation between Shenzhen AV Display Co and Dongguan Tarry Electronics, you can compare the effects of market volatilities on Shenzhen and Dongguan Tarry 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 Dongguan Tarry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen and Dongguan Tarry.
Diversification Opportunities for Shenzhen and Dongguan Tarry
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shenzhen and Dongguan is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen AV Display Co and Dongguan Tarry Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongguan Tarry Elect 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 Dongguan Tarry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongguan Tarry Elect has no effect on the direction of Shenzhen i.e., Shenzhen and Dongguan Tarry go up and down completely randomly.
Pair Corralation between Shenzhen and Dongguan Tarry
Assuming the 90 days trading horizon Shenzhen is expected to generate 10.04 times less return on investment than Dongguan Tarry. But when comparing it to its historical volatility, Shenzhen AV Display Co is 1.05 times less risky than Dongguan Tarry. It trades about 0.01 of its potential returns per unit of risk. Dongguan Tarry Electronics is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,067 in Dongguan Tarry Electronics on October 30, 2024 and sell it today you would earn a total of 1,836 from holding Dongguan Tarry Electronics or generate 36.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen AV Display Co vs. Dongguan Tarry Electronics
Performance |
| Timeline |
| Shenzhen AV Display |
| Dongguan Tarry Elect |
Shenzhen and Dongguan Tarry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen and Dongguan Tarry
The main advantage of trading using opposite Shenzhen and Dongguan Tarry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen position performs unexpectedly, Dongguan Tarry 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 Dongguan Tarry will offset losses from the drop in Dongguan Tarry's long position.| Shenzhen vs. Chengdu Kanghua Biological | Shenzhen vs. Suzhou Novoprotein Scientific | Shenzhen vs. Aluminum Corp of | Shenzhen vs. COL Digital Publishing |
| Dongguan Tarry vs. Anhui Jianghuai Automobile | Dongguan Tarry vs. Shanghai Jinfeng Wine | Dongguan Tarry vs. Tonghua Grape Wine | Dongguan Tarry vs. Queclink Wireless Solutions |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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