Correlation Between Shenzhen and Liaoning Dingjide
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By analyzing existing cross correlation between Shenzhen AV Display Co and Liaoning Dingjide Petrochemical, you can compare the effects of market volatilities on Shenzhen and Liaoning Dingjide 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 Liaoning Dingjide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen and Liaoning Dingjide.
Diversification Opportunities for Shenzhen and Liaoning Dingjide
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shenzhen and Liaoning is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen AV Display Co and Liaoning Dingjide Petrochemica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Dingjide 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 Liaoning Dingjide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Dingjide has no effect on the direction of Shenzhen i.e., Shenzhen and Liaoning Dingjide go up and down completely randomly.
Pair Corralation between Shenzhen and Liaoning Dingjide
Assuming the 90 days trading horizon Shenzhen AV Display Co is expected to under-perform the Liaoning Dingjide. In addition to that, Shenzhen is 1.46 times more volatile than Liaoning Dingjide Petrochemical. It trades about -0.15 of its total potential returns per unit of risk. Liaoning Dingjide Petrochemical is currently generating about -0.13 per unit of volatility. If you would invest 3,500 in Liaoning Dingjide Petrochemical on October 11, 2024 and sell it today you would lose (239.00) from holding Liaoning Dingjide Petrochemical or give up 6.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shenzhen AV Display Co vs. Liaoning Dingjide Petrochemica
Performance |
| Timeline |
| Shenzhen AV Display |
| Liaoning Dingjide |
Shenzhen and Liaoning Dingjide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen and Liaoning Dingjide
The main advantage of trading using opposite Shenzhen and Liaoning Dingjide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen position performs unexpectedly, Liaoning Dingjide 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 Liaoning Dingjide will offset losses from the drop in Liaoning Dingjide's long position.| Shenzhen vs. Zhongshan Public Utilities | Shenzhen vs. Kingsignal Technology Co | Shenzhen vs. Kuangda Technology Group | Shenzhen vs. CIMC Vehicles Co |
| Liaoning Dingjide vs. Xinjiang Baodi Mining | Liaoning Dingjide vs. Jiangxi Naipu Mining | Liaoning Dingjide vs. Hainan Mining Co | Liaoning Dingjide vs. Gem Year Industrial Co |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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